1. business and industrial
2. chemicals industry

1
STANDING COMMITTEE ON
CHEMICALS & FERTILIZERS
(2014-15)
SIXTEENTH LOK SABHA
MINISTRY OF CHEMICALS AND FERTILIZERS
(DEPARTMENT OF CHEMICALS AND PETROCHEMICALS)
DEMANDS FOR GRANTS
(2014-15)
FIRST REPORT
LOK SABHA SECRETARIAT
NEW DELHI
December, 2014/ Agrahayana 1936, (Saka)
CC&F.No.1
FIRST REPORT
STANDING COMMITTEE ON
CHEMICALS AND FERTILIZERS
(2014-15)
(SIXTEENTH LOK SABHA)
MINISTRY OF CHEMICALS AND FERTILIZERS
(DEPARTMENT OF CHEMICALS AND PETROCHEMICALS)
DEMANDS FOR GRANTS
(2014-15)
Presented to Lok Sabha on 10 December 2014
Laid in Rajya Sabha on 10 December 2014
LOK SABHA SECRETARIAT
NEW DELHI
December, 2014/ Agrahayana 1936, (Saka)
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REPORT
COMPOSITION OF THE COMMITTEE (2014-15) ………………………….
INTRODUCTION ………………………………………………………………..
PART-I
I
INTRODUCTORY
II
OVERVIEW OF THE CHEMICALS AND PETROCHEMICALS
INDUSTRY
III
FIVE YEAR PLANS AND ANNUAL PLANS
IV
DEMANDS FOR GRANTS 2014-15
V
AUTONOMOUS BODIES
VI
PUBLIC SECTOR UNDERTAKINGS (PSUs)
VII
OTHER ONGOING SCHEMES
VIII
PETROLEUM , CHEMICALS AND PETROCHEMICALS
INVESTMENT REGIONS (PCPIRs)
IX
NEW SCHEMES OF PETROCHEMICALS
X
BHOPAL GAS LEAK DISASTER
PART-II
OBSERVATIONS AND RECOMMENDATIONS
APPENDIX
I.
Notes on Demand for Grants 2014-15 (Demand No.6) of the Ministry of Chemicals and
Fertilizers (Department of Chemicals and Petrochemicals).
II.
Activities undertaken under the Chemical Promotion and Development Scheme
(CPDS) during 2013-14.
III.
Minutes of the Second sitting of the Standing Committee on Chemicals and Fertilizers
(2014-15) held on 28 October, 2014.
IV.
Extracts of Minutes of the Eighth sitting of the Standing Committee on Chemicals and
Fertilizers (2014-15) held on 8 December, 2014.
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COMPOSITION OF THE STANDING COMMITTEE ON CHEMICALS & FERTILIZERS
(2014-15)
Shri Anandrao Adsul - Chairperson
Members
Lok Sabha
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29. *
30.
31.
1.
2.
3.
Shri Idris Ali
Smt. Anju Bala
Shri B.N. Chandrappa
Shri Sankar Prasad Datta
Smt. Veena Devi
Shri R. Dhruvanarayana
Shri Satish Kumar Gautam
Adv. Joice George
Shri K. Ashok Kumar
Shri Kamalbhan Singh Marabi
Shri Chhedi Paswan
Smt. Kamala Devi Patle
Shri Rajendran S.
Shri Chandu Lal Sahu
Dr. Kulamani Samal
Dr. Uma Saren
Dr. Krishan Pratap Singh
Shri Tasleem Uddin
Smt. Rekha Verma
Vacant
RAJYA SABHA
Shri Biswajit Daimary
Dr. M.S. Gill
Shri Sanjay Dattatraya Kakade
Shri Narayan Lal Panchariya
Shri K. Parasaran
Shri Garikapati Mohan Rao
Dr. Sanjay Sinh
Shri Palvai Govardhan Reddy
Vacant
Vacant
SECRETARIAT
Smt. Rashmi Jain
Joint Secretary
Shri U.B.S. Negi
Director
Shri A.K. Srivastava
Additional Director
Changed the nomination of Shri Murli Deora, Member of Rajya Sabha from the Committee on Chemicals and Fertilizers to the Committee on External
Affairs w.e.f. 25-09-2014.
* Shri Palvai Govardhan Reddy, Member of Rajya Sabha nominated w.e.f. 08-10-2014
Shri Mohanbhai Kalyanjibhai Kundariya nominated as Minister of State w.e.f. 09.11.2014
The term of Shri Brijlal Khabri, MP (RS) has expire w.e.f. 25.11.2014
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INTRODUCTION
I, the Chairperson, Standing Committee on Chemicals and Fertilizers (2014-15) having
been authorised by the Committee to present the Report on their behalf, present this First
Report on Demands for Grants of the Ministry of Chemicals and Fertilizers (Department of
Chemicals and Petrochemicals) for the year 2014-15.
2.
The Committee examined the Demands for Grants (2014-15) pertaining to the Ministry
of Chemicals and Fertilizers (Department of Chemicals and Petrochemicals) which were laid in
Lok Sabha and Rajya Sabha on 5 August, 2014.
3.
The Committee took evidence of the representatives of the Ministry of Chemicals and
Fertilizers (Department of Chemicals and Petrochemicals) at their sitting held on 28 October,
2014.
4.
The Report was considered and adopted by the Committee at their sitting held on 8
December, 2014.
5.
The Committee wish to express their thanks to the Officers of the Ministry of Chemicals
and Fertilizers (Department of Chemicals and Petrochemicals) for their cooperation in
furnishing the written replies and other material/information and for placing their views
before the Committee.
6.
For facility of reference and convenience, the Observations/ Recommendations of the
Committee have been printed in bold letters at the end of the Report.
New Delhi;
5,December, 2014
14,Agrahayana, 1936 (Saka)
Anandrao Adsul
Chairperson
Standing Committee on
Chemicals and Fertilizers
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REPORT
CHAPTER I
INTRODUCTORY
1.1
The Department of Chemicals and Petrochemicals (DCPC) aims:
i.
To formulate and implement policy and programmes for achieving growth and
development of the chemical and petrochemical sectors in the country; and
ii.
To foster the spirit of public-private partnership for overall development of
above-mentioned sectors of industry.
1.2
The Department has the mandate to deal with the following broad subject matters:
i.
Insecticides excluding the administration of The Insecticides Act, 1968 (46 of
1968);
ii.
Molasses;
iii.
Alcohol – Industrial and Potable from the molasses route;
iv.
Dyestuffs and Dye Intermediates;
v.
All organic and inorganic chemicals, not specifically allotted to any other Ministry
or Department;
vi.
Planning, Development and control of, and assistance to, all industries being dealt
with by the Department;
vii.
Bhopal Gas Leak Disaster-Special Laws relating thereto;
viii.
Petrochemicals;
ix.
Industries relating to production of non-Cellulose Synthetic Fibres (Nylons,
Polyesters, Acrylic, etc.);
x.
Synthetic Rubber; and
xi.
Plastics including fabrications of plastic and moulded goods.
1.3
1.4
The major goals of the Department are:
i.
Development of 4 PCPIRs to promote manufacturing and exports.
ii.
Early commissioning of the Assam Gas Cracker Project (AGCP).
iii.
Strengthening of Central Institute of Plastic Engineering and Technology (CIPET) so
as to achieve its targets of skill development.
iv.
Set up Plastic Parks to promote MSMEs in the sector in a cluster approach.
In view of the delicensed and deregulated nature of the chemical and petrochemical
sectors, public sector investment through Plan schemes is limited. The major Plan scheme being
implemented, besides the releases made to PSUs and autonomous institutions, is the Assam Gas
Cracker Project.
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1.5
The Department has four major divisions viz. Chemicals, Petrochemicals, Planning &
Evaluation (P&E) and Statistics & Monitoring (S&M). The Internal Finance Division is common
to the three Departments in the Ministry of Chemicals and Fertilizers. There are three PSUs in
the chemical sector namely Hindustan Organic Chemicals Limited (HOCL), Hindustan
Insecticides Ltd. (HIL) and Hindustan Fluorocarbons Limited (HFL), which is a subsidiary of
HOCL, and one PSU in the petrochemical sector namely Brahmaputra Cracker and Polymer
Limited (BCPL). The autonomous institutes under this Department are Central Institute of
Plastics Engineering and Technology (CIPET) and Institute of Pesticides Formulation
Technology (IPFT).
1.6
The Department of Chemicals & Petrochemicals continued to identify its objectives and
monitor its performance through the Results Framework Document (RFD). The significant
objectives/actions pursued and monitored through the RFD 2012-13 included formulation of a
National Policy on Chemicals, oranisation of India Chem Gujarat, approval and promotion of
PCPIRs, implementation of the Assam Gas Cracker Project, development of the plastic sector
through Central Institute of Plastics Engineering Technology (CIPET), implementation of the
National Policy on Petrochemicals, coordination of relief and rehabilitation measures for the
Bhopal Gas victims, besides certain mandatory indicators such as improving the service
delivery of the Department, ensuring compliance with the financial accountability framework
etc.
1.7
The detailed Demands for Grants (2014-15) of the Ministry of Chemicals and
Fertilizers (Department of Chemicals and Petrochemicals) were presented to the Lok
Sabha on 5.8.2014. The demand shows a budgetary support of Rs 270.68 crore [(Rs 207
crore (Plan) + Rs 63.68 crore (Non-Plan)]. The Committee have examined in-depth the
detailed Demands for Grants of the Department for the year 2014-15. The detailed
analysis, along with Observations / Recommendations of the Committee are stipulated in
a separate chapter at the end of the Report. The Committee expect the Department of
Chemicals and Petrochemicals to take the Committee’s recommendations seriously and
to act on them expeditiously. The Committee also expect that the Department will take
all the necessary steps for proper and timely utilization of funds ensuring completion of
the various plans and projects in a time bound manner.
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CHAPTER II
Overview of Chemicals and Petrochemicals industry
2.1
The chemical industry is an integral part of the growing Indian industry. It includes basic
chemicals and their products, petrochemicals, fertilizers and agrochemicals, paints, varnishes,
gases, soaps, perfumes & toiletries and pharmaceuticals. It is one of the most diversified of all
industrial sectors, covering thousands of commercial products. This industry occupies a pivotal
position in meeting basic needs and improving quality of life. The industry is the mainstay of
industrial and agricultural development of the country and provides raw materials,
intermediates and process chemicals for several downstream industries such as textiles, paper,
paints and varnish, soaps, detergents, pharmaceuticals, agrochemicals etc.
2.2
According to estimates of the Central Statistical Office (CSO),chemicals and chemical
products (Industry Division 24 of NIC 2004) accounted for 2.51% of the GDP (at 2004-05
prices) in 2012-13, compared to 2.53% in 2011-12. The share of this sector in the GDP from
manufacturing sector at 2004-05 prices was 15.95% during 2012-13, compared to 15.55% in
2011-12. The annual average Indices of Industrial Production (compiled by the CSO) for
chemicals and chemical products (Industry Division 24 of NIC 2004) for 2013-14 stands at
138.6 as compared to 127.3 for 2012-13, implying a growth rate of 8.9%. As per the estimates
of the CSO, the size of the Indian Chemical industry in terms of value of output in the year 201213 was Rs. 7,82,949 crore.
2.3.
The details of production of selected major chemicals and petrochemicals during the
years 2008-09 to 2013-14 are indicated in the Table below. The production of major chemicals
and petrochemicals in 2013-14 was 19308 thousand MT, compared to 18822 MT in 2012-13,
implying a growth of 2.6 percent.
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Note: Production is aggregated based on Monthly Production returns from manufacturers under large and
medium scale.
2.4
When asked about the specific policies and programmes initiated by the Department for
achieving growth and development of the chemical and petrochemical sectors in the country
during the last one year, the Department in its written reply stated as under:“The Policies and programmes initiated by the Department for achieving growth and
development of the chemical and petrochemical sectors in the country during the last
one year is given below:Chemical:
i)
In the Chemical Sector, 100 percent FDI is permissible. Manufacture of most
chemical products inter-alia covering organic/inorganic, dyestuffs and pesticides
is delicensed. The entrepreneurs need to submit only Industrial Entrepreneurs
Memorandum (IEM) with the Department of Industrial Policy and Promotion
(DIPP). Only the following items are covered in the compulsory licensing list
because of their hazardous nature:-
-
Hydrocyanic acid & its derivatives
Phosgene & its derivatives
Isocynates & di-isocynates of hydrocarbons.
The import and export of chemicals is free except for a few chemicals attracting
the provisions of International Conventions.
ii)
To promote the Indian Chemical Industry, Department of Chemicals and
Petrochemicals and Government of Gujarat, in association with the Federation of
Indian Chambers of commerce and Industry (FICCI) have been organizing the
“India Chem Gujarat” a biennial event. The event chiefly comprises an
International Exhibition and Conference. India Chem-Gujarat 2013, the 3rd edition
of this event, was held on October 24th - 26th, 2013 at Gandhinagar, Gujarat with
the theme “Gujarat: A New Gateway to International Possibilities”. The
international exhibition was a huge success with participation of over 122
exhibitors. The exhibition received 6235 business visitors, which is an indication
of the huge interest generated by the event.
Petrochemicals:
iii)
Research & Development, innovation in product and material and creation of
skilled workforce are some of the critical areas of concern for the growth of the
petrochemical sector. Accordingly, the Department is implementing schemes for
Setting up of Centres of Excellence (CoE) in academic and research institutions
and National Awards for Innovation in the Downstream Plastic Processing
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Industries in the 12th Plan. The above schemes aim at encouraging and
incentivizing petrochemical research and technology in the country. Under the
scheme of Setting up of Centres of Excellence, Department is setting up CoE for
Advanced Polymeric Materials at IIT, Delhi, CoE on Sustainable Green Materials at
CIPET, Bhubaneswar and CoE for Sustainable Polymers at IIT, Guwahati in the
12th Plan. The assets created under CoEs have not only resulted in a boost to
research in Polymer science, but also contributed to training of several members
of polymer industry and academia. Under the 4th edition of the scheme of
National Awards (2013-14), Department felicitated 17 ‘Winners’ and 6 “Runner
Up” in a function held on 17th July, 2014 at New Delhi. Further, CIPET through its
23 centres across the country is addressing the requirement for creation of
human capital for the petrochemical industry.
iv)
The Indian Plastics industry is large but highly fragmented with dominance of
tiny, small and medium units. Department formulated a scheme for Setting up of
Plastic Parks to synergize and consolidate the capacities through cluster
development. Following the submission of DPR, the proposals from Odisha,
Madhya Pradesh and Assam have received for final approval. The Department
has released the first instalment of Rs. 8 crore for the Grant-in-Aid to Madhya
Pradesh, Odisha and Assam in the year 2013-14. In addition, Department has
provided Rs. 1000 crore capital subsidy in 2013-14 for setting up of Assam Gas
Cracker Project at Dibrugarh, Assam, which is in the final stages of completion.
Once completed, this project will contribute to the growth of the sector in NE
region, where the current consumption of polymeric materials is much lower
than the rest of the country.
Keeping in view the needs of the industry, Department gave recommendations
for trade agreements, various fiscal and non-fiscal measures, including optimizing of
customs duties etc.”
2.5
The Committee desired to know the major initiatives taken by the Department to ‘foster
the spirit of public-private partnership’ for the chemical and petrochemical sectors and the list
of PPP projects undertaken by the Department during the last three years and the progress
made therein so far. In its written reply, the Department stated as under:“The Department of Chemicals and Petrochemicals acts as a facilitator for the growth and
development of the chemical sector, and the activities of the Department are focused on
resolving the issues hampering the growth of this sector. The Department supports and
facilitates various schemes like setting up of PCPIRs, Plastics Parks etc. which involves
participation of the concerned State Governments, industry and the other Ministries /
Departments.
ii)
A number of workshops/seminars have been conducted in collaboration with the
Industry Associations/Stakeholders on various issues listed below, pertaining to
the sector:1)
2)
3)
4)
5)
iii)
CWC Convention, to sensitize the industry to discharge their obligations
under the provisions of the convention.
Rotterdam and Stockholm Convention
Safety, Security, Environment and Health related issues
Green Chemistry
Responsible Care
DCPC organizes these International/National Conferences and Exhibition in
collaboration with the Industry associations for promotion, growth &
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development as well as showcasing the strengths of the Indian chemical sector.
One such flagship event is India Chem.
For growth, development and showcasing the strengths of the Indian chemical
sector, Department of Chemicals and Petrochemicals, in collaboration with the
Federation of Indian Chambers of Commerce & Industry (FICCI), organizes the
India Chem every alternate year. This event comprises an international exhibition
and a conference of representatives of participating countries, including major
global corporates from various associated fields. The flagship international event
attracts delegates and visitors from India as well as from all major chemical
producing countries, thereby providing immense potential for enhanced trade
and investment in a mutually beneficial manner. The 7th edition of the India Chem,
was held on 4-6 October 2012 and the last edition was held on 09-11 October,
2014 in Mumbai.
iv)
For facilitating compliance by the Chemical Industry in its obligation under CWC,
the Department has set up Help Desks in PPP mode in association with the Indian
Chemical Council (ICC), Mumbai at various places having concentration of
chemical Industry of relevance to CWC. Following is the location and coverage of
CWC Help Desks:
Location
Hyderabad
Kolkata
Delhi
Mumbai
Chennai
Vadodara
Area covered
Andhra Pradesh, Orissa, Chattisgarh.
West Bengal, Bihar, Jharkhand and North Eastern Region.
Uttar Pradesh, Himachal Pradesh, Haryana, Punjab,
Chandigarh, Uttarakhand and Jammu and Kashmir.
Maharashtra, Goa, Rajasthan, Madhya Pradesh.
Tamil Nadu, Kerala and Karnataka.
Gujarat
Petrochemicals sector:
DCPC is a facilitator in the development of delicensed and deregulated Chemicals
& Petrochemical Industry. The activities of the Department are focused on resolving the
issues hampering the growth of this sector. The Department supports and facilitates
various schemes like setting up of PCPIRs, Plastics Parks etc. which involves
participation of the concerned State Governments, industry and the other Ministries /
Departments.
2.6
When asked to provide a note on investment made in Chemical and Petrochemicals
Industry for the last three years and result accrued therefrom and further strategy therefor, the
furnished the following information:“Chemical - The chemical sector is practically deregulated and no license is required to
set up chemical manufacturing capacity except for a few hazardous chemicals. 100% FDI
is permissible under the automatic route and thus the Department does not maintain
any database of the investments made.
Petrochemicals - The petrochemical sector is de-licensed and liberalized. The sector is
highly diversified and consists of upstream and downstream plastic processing industry.
The upstream sector is capital and technology intensive with long gestation period.
Some of the major petrochemical players in the upstream sector are GAIL, Haldia
Petrochemicals Ltd (HPL), HPCL. Mittal Energy ltd. (HMEL), IOCL, MRPL, RIL, etc and
together they made an investment of over Rs 65,000 crore in the last three years both in
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upstream and downstream plastic processing industry. Department as a facilitator
formulated Petroleum, Chemical and Petrochemical Investment Regions (PCPIR) Policy
and National Policy on Petrochemicals in the year 2007. The Cabinet Committee on
Economic Affairs (CCEA) has approved the establishment of PCPIRs in Andhra Pradesh,
Gujarat (2009), Orissa (2010) and Tamil Nadu (2012). These PCPIRs have already
witnessed an investment of around Rs. 148,000 crore against an expected investment of
Rs. 7,62,894 crore. These PCPIRs also provide employment to around 2.22 lakh persons
against a target of 33.96 lakh persons.
In pursuance of National Policy on Petrochemicals, Department formulated schemes viz.
(i) National Awards for Technology Innovation in various fields of Petrochemicals and
downstream Plastic Processing Industry; (ii) Setting up of the Centres of Excellence
(COE) in the field of Petrochemicals; and (iii) Setting up of Plastic Parks. The first two
schemes aim at improving and incentivizing research and development in the
petrochemical Sector. The third scheme aims at setting up need based Plastic Parks with
requisite state of the art infrastructure and enabling common facilities to assist the
sector to move up the value chain and contribute to the economy more effectively. All the
three schemes are at different stages of implementation which will contribute in
strengthening the sector.”
Production Trends
2.7
The production of Alkali Chemicals accounts for more than 70% of the total production
of major chemicals. The production of major chemicals in 2013-14 was 8601 thousand MT,
compared to 8453 thousand MT in 2012-13 implying a growth of 1.7%. The trend in the
production of selected major chemicals is depicted in the Chart below.
2.8
Petrochemicals, which comprise plastics and a host of other chemicals, are downstream
hydrocarbons derived from crude oil and natural gas. These hydrocarbons are valuable
resources and constitute vital raw materials for industries. The downstream petrochemical
products permeate our daily lives in almost every aspect. The value additions in the
petrochemicals chain offer immense possibilities and cater to the need of textiles and clothing,
agriculture, packaging, infrastructure, healthcare, furniture, automobiles, information
technology, power, electronics and telecommunication, irrigation, drinking water, construction
and a host of other articles of daily and specialised usage.
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2.9
There are four naphtha based and three gas based cracker complexes in the country with
a combined annual ethylene capacity of 3.85 million MT. In addition, there are five aromatic
complexes also with a combined Xylene capacity of 3.5 million MT.
2.10
The production of polymers accounts for more than 60% of the total production of major
petrochemicals. The production of major petrochemicals in 2013-14 was 10707 thousand MT,
compared to 10368 thousand MT in 2012-13, implying growth of 3.3%. The trend in the
production of selected major petrochemicals is depicted in the Chart below.
International Trade
2.11
Trends in exports and imports of major chemicals and major petrochemicals during
2009-10 to 2013-14 are shown in Tables and Charts depicted below
Exports and Imports–Major Chemicals and
Major Petrochemicals
A. Exports
(Figures in Crores of Rs)
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2.12
The import of major chemical and petrochemical products contributed 8.6% of total
imports in 2013-14, compared to 7.6% in 2012-13 whereas exports of major chemical and
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petrochemical products contributed 9.4% of total exports in 2013-14, compared to 9.3% in
2012-13.
2.13
When asked to spell out the initiatives being taken to increase exports and decrease
imports of major chemical and petrochemical products, the Department, in a written reply,
stated as under:“The exports of major chemicals and petrochemicals for the last five years is as under:Export:Figures in Rupees crores
2009-10
VALUE
OF
84220
EXPORTS
% SHARE IN TOTAL 10.0
EXPORTS
2010-11
2011-12
2012-13
2013-14
104277
135546
151277
177931
9.2
9.2
9.3
9.4
Imports:Figures in Rupees crores
Value of
Imports
% Share In Total
Imports
2009-10
2010-11
2011-12
2012-13
2013-14
106904
133590
168688
202347
234258
7.8
7.9
7.2
7.6
8.6
The following initiatives have been taken and/or being taken in the chemical sector to
further increase the growth of exports in this sector:
I)
Events such as India Chem, India Chem Gujarat are organized to attract delegates
and visitors from India as well as from all major chemical producing countries, thereby
providing immense potential for enhanced trade and investment in a mutually beneficial
way. These events, through showcasing the strengths of the Indian chemical industry,
help in development, growth of chemical sector and acceleration of exports of chemicals
from India to other countries.
II)
Government is in the process of formulation of a ‘National Chemical Policy’ for
realising the goal of ‘Make in India’, i.e. the policy has strong emphasis on making the
chemical manufacturing competitive. Accordingly, the Policy envisages ensuring
Feedstock availability, creation of world class infrastructure, focus on R&D, human
resource development application of green technologies for sustainable growth of the
Chemical Sector. The Policy is in the draft stage.
These measures will increase the competitiveness and facilitate deeper value addition of
the chemical sector, which will result in enhancing the exports.
In the Petrochemical Sector, the Government has formulated ‘Petroleum, Chemicals and
Petrochemical Investment Regions (PCPIRs) Policy’ for promoting investment, providing
a boost to manufacturing, augmenting exports and generation of employment. This
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policy is an initiative to cater to the evolving needs of the industry. Such PCPIRs are
envisioned to reap the benefits of co-sitting, networking and greater efficiencies through
use of common infrastructure and supporting services. The policy provides that each
PCPIR would have a refinery /petrochemical feedstock company as an Anchor Tenant.
This refinery would provide feed stocks to the downstream and upstream user
industries. Such PCPIRs would provide world class infrastructure to the units.
Government has approved setting up of PCPIR in Andhra Pradesh, Gujarat, Odisha and
Tamil Nadu.
Government has formulated a ‘Plastic Park scheme’ which aims at setting up Plastic
Parks, as manufacturing clusters with state-of-the-art infrastructure and enabling
common facilities to assist the sector to move up the value chain and contribute to the
economy more effectively. The Government has accorded approval for setting up plastic
parts in Madhya Pradesh, Assam, Orissa and Tamil Nadu. These plastic parks will give
boost to the growth of plastic sector in the country.
Government has approved the scheme for setting up of Centres of Excellence which aims
at improving the existing petrochemicals technology and research in the country and to
promote development of new applications of polymers and plastics. Government is
setting up five Centres of Excellence.
The chemicals and petrochemicals are free for imports. Based on the techno economic
feasibility and price considerations, entrepreneurs import basic inputs for making final
products for meeting the domestic as well as export led demands.
These long term measures will increase the competitiveness and deepen the value
addition potential of the petro-chemical sector, and will thus facilitate in enhancing
exports and decreasing imports. The Department is also taking up the matter with
Department of Revenue, Ministry of Finance for rationalisation of import duties for
improving the competitiveness of the Indian petrochemical sector.”
2.14
During the course of evidence, the Secretary of the Department informed the Committee
as under:“To begin with, I would like to bring to the notice of the Chairperson and the hon.
Members that chemicals and petro chemicals are one of the fastest growing
manufacturing activities in India. Even during the recession time, it had grown at the
annual growth rate of eight per cent.
When we talk about chemicals, we talk about bulk chemicals, specialty chemicals, agro
chemicals, petro chemicals and fertilizers. When we talk of petro chemicals, it is
basically in plastics in common language.
Sir, the consumption of chemicals and petrochemicals in India, when compared to the
rest of the world, is very less. If we compare our per capita consumption of chemicals
with that of Europe, the per capita consumption of Europe is 60 kg whereas India’s per
capita consumption of chemicals is only six kg. The per capita global consumption of
Plastics is 30 kg. whereas India’s consumption of Plastics is only 10 kg. The per capita
consumption of Plastics in America is more than 100 kg. Therefore, what I mean to say
is that there is a huge gap and this sector can develop massively to fill up the gap. That is
how the sector is growing.
Our production of chemicals is about 118 billion US dollars whereas the global
production is 3.9 trillion US dollars. We are growing at the rate of eight per cent per
annum whereas the global growth rate is three to four per cent.
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Share of chemicals in the manufacturing activity in GDP of India is 15 per cent. Our
share in exports is nine per cent. The major States producing chemicals are Gujarat,
Maharashtra and Uttar Pradesh. They account for 50 per cent of the total production in
the country.
Our net growth rate of imports from 2009-13 has been increasing at the rate of 20 per
cent. That is because there is a gap between production and consumption in India.
Our imports during 2012-13 were Rs.2,00,234 crore whereas our exports were only only
Rs.1,50,706 crore. This gap is widening because production is not matching with the
increasing levels of consumption.”
2.15
While expressing their dissatisfaction in their 34th Report (Rec. No. 3), over the
performance of the Department in terms of meeting financial targets and utilization of funds
during 2012-13, the Committee desired to know about the steps taken by the Department to
address the issue. In its written reply, the Department stated as under:“The Department periodically reviewed and monitor various schemes under
implementation for optimum and timely utilisation of funds. The financial prudence is
exercised through advance planning for release of funds in instalments as per
requirement as well as insistence on utilisation certificates of earlier funds, before
according approval for further releases. The allocated funds are utilised optimally and
periodically to avoid injudicious used at the end of financial year.”
2.16
On being enquired about the plan of the Department to check the continuous increase in
imports of chemicals and petrochemicals, the Secretary of the Department responded during
the course of evidence as under:“With regard to petrochemicals there is the basic problem of availability of feedstock.
And then when the companies import the feedstock from abroad there is a duty on that
which is another problem. There is the availability problem, allocation problem, and
there is the import problem. This is one issue and we need to resolve it.
The major portion of chemicals is the bulk chemicals which are the most polluting
chemicals. Those are the chemicals production of which has been stopped in the west
and brought to countries like India. Because of environmental reasons, the safety
standards are very difficult to meet. If they are met, then it is very costly and the product
becomes in-competitive. So the industry is not able to grow.
The main area to grow for the chemical industry is the specialty chemicals. Specialty
chemicals are small volume chemicals but high priced chemicals. They are performance
chemicals. They are not used directly but they act as catalysts and change the
performance of the chemicals. Most of those chemicals are being produced in the west.
So our effort is also to promote manufacturing of those chemicals.
Of course we have PCPIRs, Plastic Parks and we are putting our best foot forward to
ensure that the gap between the consumption within India leading to import from
abroad is bridged as much as possible.”
There is a shortage of raw material in the petrochemicals industry because it basically
comes from gas and petrol and we have very less production of it.”
In this regard, a representative of the Department also stated as under:-
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“To address the feedstock problems, Hon. Minister had announced one programme
called the Reverse SEZs, that is setting up of SEZs in foreign countries, primarily oil-rich
countries. Hon. Minister mentioned two countries, one is Iran and the second is
Myanmar. Most probably I think within a month’s time a delegation will be sent. It is not
finalised as yet.”
2.17
In this context, the Secretary of the Department further clarified during the evidence as
under:"It is at concept stage. There is one problem in that. The feedstock is freely
available in those countries and our people go and put up factories there and
make the products.
As there are SEZs in India for exporting, there will be SEZs there for importing.
The major problem with this is that in those countries we cannot freely employ
Indians. That will be a problem. If we are putting up a plant in the Middle East,
there is problem there because the Indian workforce faces certain issues which
have to be overcome. These are the issues which have to be overcome. The initial
discussions, exchange of ideas, concept building and cooperation has already
started. It should happen sooner than later. "
2.18
During the course of evidence of the Department, the Committee pointed out that
pesticides and other chemical manufacturing companies are not taking care of the environment
and no concrete steps are being taken to check pollution. Responding to this, the Secretary of
the Department, stated as under:“I fully share the sentiments of the hon. Member. I am also aware of the issue because I
worked in the Department of Environment earlier. In India, awareness about
environment and environment compatibility is very poor, and there is no dispute and
there cannot be a second opinion on it. Even in our solid-waste management there is so
much of chemical and petro-chemical, and they are silently killing our soil and water. We
do not realise that there are chemicals and petro-chemicals in bio-medical waste; there
are chemical and hazardous waste in chemical industries; and there are hazardous and
toxic chemicals in electronics, that is, in our computers, cell-phones, fridge and all
electronic gadgets, which is called e-waste about which we are not aware. They are
disposed here and there, and they are allowed to get into the environment through soil
or water.
There are chemicals in our sewage water also, and those chemicals are not safely
deposited after STP treatment. I am aware of it, and I have also seen the concerns of this
hon. Committee in the previous sittings. This opinion has been repeatedly expressed,
and my Department has taken it very seriously now. But the issue has to be put in
perspective, that is, the regulatory power of enforcing this compatibility norms are with
the Ministry of Environment and Forest, and only they have the authority to punish them
and issue orders. Now, that operates through the State Governments. We, as a
Department promoting chemicals and petro-chemicals, also have to take care that not
only we promote these activities, but we also deal with them in such a way that they are
environmentally sustainable. It is there in our petro-chemical policy, and it is going to
get into our National Chemical Policy also, but as such, the Department has not brought
out any specific programme to facilitate the treatment of hazardous waste, and
treatment and deposition of hazardous waste. We are fully concentrating on it, and we
will be coming out with some policy and programme in a short while. So, I can assure the
hon. Chairman and all the hon. Members that by the time you call us for the next
meeting, we would have taken some concrete action on this issue.”
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2.19
When the Committee opined that instead of rules and regulations being implemented
through Ministry of Environment and Forest, there should be some self-imposed restrictions so
that the environment is least affected, the Secretary of the Department stated as under:“Absolutely, Sir. they are not getting environmentally compatible, and the industry is
facing problem. They did it in Tirupur, Vapi, Ankleshwar and Panoli, and they were
closed. It is happening everywhere. But I do agree that awareness or concern about all
these issues is not as much in the industry. It is the duty of my Department to ensure
that we create awareness and concern about these issues. When we are promoting the
industry, we also promote environment compatibility from the industry. That is the
responsibility of our Department… In fact, in the Department, we have been preparing a
Vision Paper on this..which is coming out soon. We have done a lot of work. In fact, my
Joint Secretary was not agreeing with me. Then, he went to Indonesia and he saw with
his own eyes how they are treating their waste. Then, he came and told me, ‘Sir, you are
right.’”
National Policy on Petrochemicals
2.20
The Petrochemicals sector in India has the potential of capturing large investments to
become a major global player. The National Policy on Petrochemicals announced in 2007 aimed
to increase investments in the sector, both upstream and downstream, increase the use of
petrochemicals in thrust areas, facilitate investment in the emerging areas of the petrochemical
sector and achieve environmentally sustainable growth through innovative methods of
development of bio-degradable polymers and plastics.
2.21
Under the National Policy on Petrochemicals, three schemes viz. (i) National Awards for
Technology Innovations in Petrochemical and downstream Plastic Processing Industry (ii)
Setting up of Centres of Excellence (CoE) and (iii) Setting up of Plastic Parks has been
formulated.
2.22 When asked to give a status report on the proposed National Chemical Policy 2012, the
Department replied as under:“The draft Policy was prepared after extensive consultations with all the stakeholders
and it was posted on DCPC website in March 2012 for public consultation. The first
round of inter-ministerial consultation and discussion with Industry was held in July
2012. Based on discussions and the feedback received, a revised draft was prepared, and
the 2nd & 3rd round of consultations was held in August, 2013 and December, 2013. A
Drafting Committee, comprising the representatives of the stakeholders was constituted
which formulated the updated version in December, 2013 and sent it for InterMinisterial consultation. The policy document is expected to be finalized soon.
The Policy aims to make strategies for sustainable growth and development, increasing
investments, ensuring feedstock availability, R&D promotion. The emphasis is on Green
Chemistry, HRD, technology up-gradation, disaster management, safety in chemical
plants, etc.”
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CHAPTER III
Five Year Plans and Annual Plans
3.1
The details of Plan Outlays for the 12th Five Year Plan and Annual Plans 2012-13 and
2013-14-BE, RE & Expenditure, Annual Plan 2014-15-BE, Annual Plans 2015-16 and 2016-17 –
proposed outlays, as furnished by the Department, are given in the Table as shown below:(Rs in crores)
Annual Plan 2012-13
Sl.
No.
Name of Scheme
12th
Plan
(Outlay)
BE
RE
Annual Plan 2013-14
Expenditure
(as % of RE)
BE
RE
Expendi
-ture
(as % of
RE )
Annual
Plan
2014-15
(BE)
I
Project Based Support
to PSUs
1.1
Hindustan Organic
Chemicals Ltd. ( HOCL )
1.2
Hindustan Insecticides
LTD. ( HIL )
1.3
Hindustan fluorocarbons
LTD (HFL)
II
Support to
Autonomous Bodies
2.1
Central Institute of Plastic
Engineering &
Technology ( CIPET )
280.15
110.00
40.00
21.70
(54.25%)
140.96
140.96
140.96
(100%)
2.2
Institute of Pesticides
Formulation Technology
(IPFT)
15.00
7.00
4.34
0.19
(4.38%)
4.34
4.34
4.34
(100%)
2552.00
1552.00
1552.00
1552.00
(100%)
1000.00
976.96
976.96
(100%)
12.50
10.00
2.00
1.19
(56%)
3.00
3.00
2.86
(95.33%)
III
3.1
Other Ongoing
Schemes
Assam Gas Cracker
Project (AGCP)
(Proposed)
26.00
24.63
17.60
(71.46%)
10.00
8.04
0.00
0.01
0.00
0.00
4.60
14.00
4.10
4.10
(100%)
0.00
0.00
0.00
15.00
0.20
0.10
102.98
20.00
0.00
5.00
2.31
1.57
4.30
2.50
2.50
0.96
(64%)
0.70
(100%)
1.20
1.50
1.50
0.50
0.50
0.50
31.34
(79.34%)
1158.12
(98.56%)
57.50
5.22
1.50
207.00
32.23
7.67
20.50
Chemical Promotion &
Development scheme
(CPDS)
3.3
Chemical Weapons
Convention ( CWC )
7.50
1.50
1.00
0.89
(89%)
1.50
1.50
3.4
IT/Sectt.
2.50
0.30
0.30
0.30
(100%)
0.70
0.70
3.5
Other New Schemes of
Petrochemicals
104.85
36.20
8.63
8.63
(100%)
39.50
39.50
3013.00
1757.00
1637.00
1606.60
(98.14%)
1200.00
1175.00
3.2
Annual
Plan
2016-17
33.90
3.2
Total
Annual
Plan
2015-16
0.01
The Committee noted that while Rs. 24.63 crore was allocated to HOCL at RE stage, only
Rs. 17.60 crore was utilized, leaving an unutilized amount of Rs. 7.03 crore. According to the
explanation of the Department, this was because the release of Plan loan to HOCL was not
approved by the Ministry of Finance. The Committee, therefore, asked the Department to
explain the reasons as to why the Ministry of Finance did not approve the release of plan loans
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to HOCL and what was the plan of the Department and how much loan was demanded for the
purpose. In its written reply, the Department stated as under:“Out of total allocation of Rs. 24.63 crore to HOCL at RE stage in 2012-13, schemes
amounting Rs. 17.60 crore relating to renewal/ replacement of machinery were
approved and the amount disbursed to HOCL as plan loan. Ministry of Finance,
Department of Economic Affairs, Budget Division did not approve the release of fresh
loan of Rs. 7.03 crore to HOCL advising the Department that for relaxation/
restructuring further or disinvestment of the company, the Department should approach
CCEA (i.e. the approval of this loan was subject to CCEA approval). The loan of Rs. 7.03
crore was required by HOCL for replacements of machinery and procuring new
machinery.
Since the file was received back from Ministry of Finance on 18th March 2013 i.e. at the
end of the financial year 2012-13, the matter could not be taken with MoF. HOCL has
been referred to BIFR and a revival/ restructuring study is under progress.”
3.3
The Committee also noted that while Rs. 40 crore was allocated to CIPET at RE stage
during 2012-13, only Rs. 21.70 crore was utilized, leaving an unutilized fund of Rs. 18.30 crore.
According to the Department, this was due to non-appraisal of new Schemes and non-approval
of continuation of existing schemes by the Integrated Finance Division (IFD) in time. The
Department was therefore asked to explain as to why the IFD did not appraise the new schemes
or approve the continuation of existing schemes proposed by CIPET and what were the new
schemes proposed by the Department. In response to the Committee’s query, the Department
replied in writing as under:“The Department had replied that the various proposals for continuing and new schemes
for plan assistance to CIPET were formulated and proposed for financial concurrence
after due examination and analysis, during 2012-13. All the schemes were not
concurred to by Integrated Finance Division (IFD) of the Department in absence of
finalization of 12th Plan outlay (by the Planning Commission). An allocation of Rs. 484
crore was initially sought for CIPET for 12th plan including support of Rs. 110 crore in
annual plan of 2012-13. The final approval for plan size of Rs. 2890 crore for the
Department was communicated in January, 2013 only, when less than 3 months were
left in the financial year and the allocation for CIPET was reduced from Rs. 484 crore to
Rs. 280 crore. This resulted in reduced outlay of Rs. 40 crore for CIPET as final allocation
for 2012-13. In absence of finalization of plan outlay and financial concurrence for the
CIPET proposals, only limited schemes were approved for further releases, resulting in
utilization of Rs. 21.70 crore only. The details of the schemes proposed by the
Department to IFD for consideration are as under:
Sl.
No.
Name of the Scheme
a)
b)
c)
Setting up of ATPDC, Madurai
Setting up of APPTC, Balasore
CBPST, Kochi
d)
e)
Research & Development in emerging
areas of Civil and technical infraCreation
structure for expansion of CIPET
Centres
Creation of Hostel Accommodation to
augment increase in intake capacity of
existing and new academic
f)
Date of
proposal to
IFD
21.06.2012
21.06.2012
07.12.2012
Concur—
rence of
IFD
16.07.2012
16.07.2012
17.01.2014
Utilisation
during
2012-13
1.95
1.25
--
Remarks
18.09.2012
11.09.2012
31.01.2013
01.08.2013
2.00
--
---
01.08.2012
31.01.2013
--
EFC meeting –
21.03.2013
Finance Minister
In principle approval from
Planning Commission
received on 07.01.2014.
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Sl.
No.
Name of the Scheme
Date of
proposal to
IFD
Concur—
rence of
IFD
Utilisation
during
2012-13
programmes
g)
Enriching Technical Infrastructure
facilities & capabilities to meet industry
needs
Remarks
Approval – 24.05.2013
11.09.2012
26.03.2013
20.94
SFC meeting –
21.03.2013
The 12th Five Year Plan Outlay was fixed by Planning Commission very late (21st
February, 2013). In view of the same, IFD could not appraise the individual schemes and
annual outlays in time as proposed by the Department.”
3.4
Regarding IPFT, while Rs. 4.34 crore was allocated at RE stage, only Rs. 0.19 crore was
utilized, leaving a huge unutilized fund of Rs. 4.15 crore. According to the Department, this was
because the plan schemes of IPFT were not approved by the Planning Commission. The
Committee therefore desired to know as to what were the reasons based on which the Planning
Commission did not approve the plan schemes and the reaction of the Department to the
Planning Commission in this regard and what measures are being taken to remedy the
situation. In its written reply, the Department stated as under:“In-principle approval of Planning Commission was sought by the Department in
February, 2013, after the concurrence of the Department’s Finance Wing. The matter of
3rd party assessment v/s internal evaluation and in-principle approval from Planning
Commission was discussed in Planning Commission in March, 2013, in which Planning
Commission sought details of actual expenditure for 2012-13 and reasons for not
undertaking the 3rd party evaluation and details of the internal evaluation. Thereafter, a
detailed note was sent to Planning Commission. However, no approval was received
from the Planning Commission and thus funds lapsed on 31.03.2013. During 2013-14
Rs.4.34 crore was allocated and Rs.4.33 crore was released.”
3.5
The Committee noted that the Chemical Promotion and Development Scheme (CPDS)
utilized only Rs. 1.19 crore out of Rs. 2 crore allocated at RE stage (2012-13). In this regard, the
Department was asked to explain the reasons for this poor performance and elaborate on
measures taken to rectify the situation. In its written reply, the Department stated as under:“Out of Rs. 2.00 crore allocated at RE stage, Rs. 1.19 crore was utilized during the
financial year 2012-13, in providing grant for events/seminars/ held for promotion of
Chemical and Petrochemical Industry. An amount of around Rs. 50 lakh earmarked for
CIPET for organizing the event Advancement in Polymeric Materials (APM) 2012 could
not be released during 2012-13. The same was released in next financial year.”
3.6
The Committee noted that Rs. 0.11 crore meant for CWC have not been utilized during
2012-13 for the reasons as explained by the Department that some awareness programmes
could not be held in the month of March, 2013. In this regard, the Committee desired to know
the details of the awareness programmes originally planned by the Department and whether
the Department proposes to go ahead with the proposal during 2014-15 and if so, what
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initiatives have been taken by the Department in this regard. In its reply, the Department stated
in writing as under:“During 2012-13, 12 awareness programmes were conducted by the Department with
assistance of CWC Help Desks. A few could not be held due to certain logistic problems.
During 2013-14, the Department organized 15 such Awareness Programmes and two
more programmes were also held with the help of ICC. For the year 2014-15, the
Department in consultation with ICC has approved a calendar of 15 CWC Awareness
Programmes in the following locations:
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Location
Western Region
Ankleshwar
Vadodara
Ahmedabad
Mahad
Vapi
Eastern Region
Kolkata
Bhubaneshwar (Odisha)
Southern Region
Chennai
Vishakhapatnam
Bangalore
Hyderabad
Cochin
Northern Region
Bhiwadi/Alwar
Lucknow
Ludhiana
In addition, the Department has also planned to hold, in collaboration with ICC, five
more workshops on various issues pertaining to CWC at different venues, with active
participation of stakeholders including Ministries and Industry.”
3.7
Scheme-wise outlays and expenditure during 2013-14 as furnished by the Department
are given in the Table below:
(Rs. in crores)
Name of the Scheme
Schemes
1
2
Annual Plan 2013-14 (RE
&Exp)
RE
Hindustan Organic Chemicals Ltd.(HOCL)
Central Institute of Plastic Engineering &
Technology (CIPET)
Shortfall
Expenditure
8.04
0.00
0
140.96
140.96
100
4.34
4.34
4
Institute of Pesticides Formulation
Technology (IPFT)
Assam Gas Cracker Project
976.96
976.96
5
Chemical Promotion and Development
Scheme (CPDS)
3.00
2.86
6
7
Chemical Weapons Convention (CWC)
IT/Sectt.
1.50
0.70
8
Other New Schemes of Petrochemicals
Total
39.50
1175.00
3
% of
expenditure
w.r.t. RE
8.04
100
100
95.33
0.14
0.96
0.70
64
100
0.54
31.34
1158.12
79.34
8.16
16.88
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3.8
The Committee noted that HOCL failed to utilize its allocated amount of Rs. 8.04 crore
totally. According to the Department, this was due to non-receipt of ‘in-principle’ approval
from the Planning Commission. In this regard, the Department was asked by the Committee to
explain the reasons provided by the Planning Commission for not providing ‘in principle’
approval to the allocation. Further, the Committee desired to know as to whether the
Department/HOCL had given any response to the Planning Commission in the matter and if so,
what was the reaction of the Planning Commission. In reply to this, the Department stated in
writing as under:“Rs. 10 crore was allocated for HOCL at BE stage which was subsequently reduced to Rs.
8.04 crore at RE stage and the same could not be released as no approval was received
from Planning Commission and Ministry of Finance. All out efforts were made to achieve
the targets and close coordination for ‘in-principle’ approval of the schemes from the
Planning Commission as well as approval for fund release/disbursal from the Ministry of
Finance was made. A number of meetings were held with both these organizations to
clarify the issues further for this purpose. No specific reason was communicated by the
Planning Commission for not according approval.”
3.9
Out of Rs. 3.00 crore allocated to CPDS at RE stage, Rs. 0.14 crore could not be utilized
due to non-receipt of approval of Department of Expenditure to the proposal of Department for
grant of assistance to FICCI for organising “India Chem Gujarat 2013”. In this regard, the
Committee desired to know as to when the proposal was placed before Department of
Expenditure for their consideration and approval and whether it was not sent to Department of
Expenditure at RE stage. The Committee also asked as to why it was necessary to send the
proposal again to Department of Expenditure if it was approved/agreed at RE stage and
queried about the efforts made by the Department to get the proposal cleared by the
Department of Expenditure. In its written reply, the Department stated as under:“India Chem Gujarat 2013” was held on 24-26, October, 2013 at Gandhinagar, Gujarat.
The financial support to FICCI for organization of the India Chem Gujarat 2013 was
approved by Hon’ble Minister of State (I/C), Chemicals & Fertilizers in the month of
November, 2013. The file was referred to Ministry of Finance, Department of
Expenditure in the Month of December, 2013, after obtaining the audited details of
actual expenditure incurred by FICCI for organization of the event. MoF returned the file
with certain queries. The replies to the queries were prepared based on clarification
obtained from FICCI. The File was again referred to MoF in March, 2014. Department of
Expenditure conveyed their concurrence in April, 2014. Sanction to FICCI was issued
during the current Financial Year 2014-15.”
3.10
Further, out of Rs. 1.50 crore meant for CWC, Rs. 0.54 crore could not be spent on several
awareness programmes which could not be implemented during the year. In this regard, the
Committee desired to know the reasons due to which the proposed awareness programme
could not be materialized and also to explain the awareness programmes which were proposed
for implementation during the year. In its written reply, the Department stated as under:24
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“The total number of CWC Awareness Programme conducted with the assistance of Help
Desks during the FY 2013-14 was 15. In addition, two industry consultations were held
jointly by Department and ICC to discuss certain CWC related issues like sequential
inspections and mixed plant site inspections.”
3.11
A shortfall of Rs. 8.16 crore has also been reported under “Other New Schemes of
Petrochemicals” as the DPR for establishment of a Plastic Park in the state of Tamil Nadu has
not been received from them. In this regard, the Committee desired to know the estimated cost
of the said project and what efforts were made by the Department to expedite the DPR by the
state of Tamil Nadu. In its response, the Department stated in writing as under:“The status of preparedness of DPR by Tamil Nadu is periodically monitored by the
Scheme Steering Committee (SSC). Tamil Nadu Industrial Development Corporation
(TIDCO) has submitted DPR in September, 2014. The report is being examined for
placing it before SSC. The total estimated cost of the project is Rs. 294 crore.”
3.12
The Committee noted that the Assam Gas Cracker Project (AGCP) has witnessed cost and
time overruns and asked for detailed reasons that resulted in non-commissioning of the Project
by December, 2013. In its written reply, the Department stated as under:“The Standing Committee to fix the responsibility for cost and time overrun identified
the following reasons for delay in commissioning of the Project by December,2013;
i. Lack of adequate and effective implementation By Engineers India Limited(EIL),
the Engineering and Project Management Consultant(EPMC) for the project;
ii. Delay in permission from statutory authority (Forest Department, Government of
Assam) for utilizing sand/earth for construction purpose;
iii. Financial crunch faced by the contractors;
iv.
Inadequate mobilization of resources(manpower and machinery);
v.
Delay in mobilization of 650 MT crane by contractor for erection of structure;
vi.
Underestimation of storage capacity of raw material;
vii. Misplacement /mismanagement of material;
viii. Loss of working days due to bandh, strike, rain, etc.;
ix.
Macroeconomic factors beyond control of the implementing agency.”
3.13
On being enquired by the Committee about the measures taken to ensure that the
project is commissioned as per revised schedule of September, 2014, the Department in its
written reply stated as under:"The schedule for commissioning has been further revised to June, 2015. The following
measures are being taken at various levels to ensure that the project is completed within the
revised schedule:
1. Regular reviews at the level of Chairman & Managing Director, BCPL and
Secretary(C&PC) , including site visits
2. Close monitoring of project in concert with Project Management Consultant viz., M/s EIL
for effective strategies to address the backlog in construction and achievement of
committed target dates.
3. Rigorous monitoring of all contracting and delivery activities for expeditious decision
making.
4. Extending financial assistance to the contractors facing financial crunch and offloading
work of the non performing agencies.
5. Day to day supervision of pre-commissioning activities to prune the time period of precommissioning / commissioning activities.
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6. Close liasioning with ministry of Environment & Forests (MoE&F) to facilitate
environmental clearances and ministry of Petroleum & Natural Gas (MoPNG) for
effective steps to ensure EIL and GAIL commit and provide priority and enhanced
synergy for the project.
7. Close liasioning with state / District authorities to address the issues concerning safety,
security and local issues.
8. Close liasioning with all stakeholders to avoid hold up for requisite funding for the
project.
9. Augmentation of the recruitment of BCPL manpower including availability of
experienced manpower by GAIL for expediting the execution.”
3.14
In this regard, the Secretary, Department of Chemicals and Petrochemicals stated during
evidence as follows:
“There is Assam Gas Cracker Project, which is basically meant for assisting the NorthEast States. It was conceptualised many years ago but the actual activitity started in
2007. The cost and time overruns have been there. I am glad to inform the hon.
Committee that the mechanical completion of the Assam Gas Cracker Project is coming
to an end and we are planning to complete it by the end of November next month. Precommission and commission activities of the project have already started.”
3.15
The Department elaborated that the existing 12th Plan budgetary allocation for the
scheme of setting up Plastic Parks is insufficient even for the 4 proposals under
implementation, DCPC is unable to consider good proposals from States like Haryana, Uttar
Pradesh, Gujarat and Kerala. Accordingly, Department would request Planning Commission
during Mid-Term Appraisal to enhance the Plan allocation for Plastic Parks scheme to Rs.400
crore for enabling it to set up 10 Plastic Parks.
3.16
In this regard, when the Committee desired to know about the number of proposals
received by the Department from the States for setting up Plastic Parks in their states and their
present status, the Department in its written reply stated as under:“The Department circulated Scheme guidelines in November,2011 seeking proposals
from the State Governments. In response, 9 preliminary proposals were received as
under:
1)
Assam Industrial Development Corporation (AIDC), Assam
2)
Adani Ports and SEZ Ltd.(APSEZ), Gujarat
3)
Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd. (MPAKVN), Bhopal, Madhya
Pradesh
4)
Industrial Infrastructure Development Corporation (IDCO) Odisha
5)
ALP Polymer Park Pvt. Ltd., Rajasthan
6)
Tamil Nadu Industrial Development Corporation(TIDCO), Tamil Nadu
7)
Bengal Infrabuilder Pvt. Ltd. and West Bengal Small Industries Development
Corporation (WBIDC), West Bengal
8)
First League Infrastructure Ltd., Andhra Pradesh
9)
M/s BCL Industries and Infrastructure Ltd., Bathinda, supported by Govt. Of
Punjab.
It was decided to consider preliminary proposals, having clear State Government
support, in the first instance. Thus, the representatives of the following State
Governments were invited to make presentations before the Scheme Steering
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committee (SSC): Assam, Madhya Pradesh, Tamil Nadu, Gujarat, Odisha, West
Bengal and Punjab. However, representatives of the State Governments of West
Bengal and Punjab did not attend. The SSC decided to assign due weightage and
priority to the proposals having support and active participation of State
Government or its agency/ undertaking in the SPV‘s equity structure while
evaluating the proposals and accordingly granted ‘in principle’ approval to the 4
proposals from Tamil Nadu, Madhya Pradesh, Assam and Odisha. Following the
submission of DPRs and final approval, the Department has released the first
instalment of Rs. 8 crore of the Grants-in-Aid to Madhya Pradesh Plastic Park
Development Corporation Ltd. (MPPPDCL), Paradeep Plastic Park Ltd. (PPPL) and
Assam Industrial Development Corporation (AIDC) for setting up of Plastic Park
at Madhya Pradesh, Odisha and Assam, respectively. The DPR , complete in all
respects, from Tamil Nadu is awaited.
Subsequently, 4 other State Governments/ Organizations have also evinced
interest in setting up plastic parks in respective states, as enlisted below:
1.
2.
3.
4.
Haryana State Industrial and Infrastructure Development Corporation Ltd.
(HSIDC), Haryana.
Kerala Industrial Infrastructure Development Corporation (KINFRA) , Kerala.
Uttar Pradesh State Industrial Development Corporation Corporation Ltd.
(UPSIDC), Uttar Pradesh.
M/s Gee PEE Realities Pvt. Limited, Mumbai for setting up of Plastic Park at
Khairjhiti Village, Rajnandgoan District., Chattisgarh.
The Plan budgetary allocation for the scheme under the 12th plan is Rs.75 crore, which is
not adequate to meet the requisite funding of Rs.160 crore for 4 plastic parks. As a
result, proposals other than those accorded ‘in principle’ approval or final approval,
could not be considered by the Department due to fund constraint.”
3.17 When the Committee asked the Department to elaborate the detailed action plan of the
Department to enable them to set up 10 Plastic Parks in the country, the Department in its
written reply stated as under:“Department is implementing 4 Plastic Parks in the 12th five year plan. The plan
budgetary allocation for the scheme under the 12th plan is Rs 75 crore, which is not
adequate to meet the funding of Rs. 160 crore for 4 plastic parks. Keeping this in view
and the demand from other States, a proposal for additional budgetary allocation of Rs.
280 crore for setting up 7 Plastic Parks during the 12th Five Year plan was submitted to
Planning Commission, which was not agreed to due to funds constraint. Planning
Commission has asked DCPC to take up the matter during the Mid-Term Appraisal of the
12th Plan.”
3.18 When asked if the Department has any proposal to take up the said matter during the
Mid-Term Appraisal of the 12th Plan, the Department in a written reply stated as under:“The Department has initiated a proposal for implementation of 10 dedicated Plastic
Parks (two each approved in 11th and 12th Plan respectively and additional six proposed
for the 12th Five Year Plan) over a period of 8 years including 12th Plan (2012-17) and
13th Plan (2017-22) at a cost of Rs. 405 crore (Rs. 400 crore for 10 Plastic Parks and Rs. 5
crore for Programme Manager Fee). The proposal, after concurrence to by Financial
Adviser and approval by Secretary (C&PC), has been circulated to concerned
Departments /Ministries, for inter departmental consultations.”
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3.19
The Committee were informed in writing that lump sum provision for the North-East
Region (NER), its percentage to the total BE of the Department and actual utilization for the last
three years and the current year are as under:(Rs. in Crore)
Year
2011-12
2012-13
2013-14
2014-15
Provision
BE
80.00
175.70
120.00
31.17
RE
100.00
175.70
117.50
-
%age to Actual
BE Utilization
10%
100.00
10%
175.70
10%
117.50
15%
-
Allocations to the Department for the last three years (2011-12 to 2013-14) to N.E.
Region at BE and RE stage has been to the Assam Gas Cracker Project, which has been
utilized in full.
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CHAPTER IV
Demands For Grants 2014-15
4.1
The details of budget proposals made to Planning Commission for 2014-15 and the
amount actually allocated by the Planning Commission are as follows:(Rs. in crore)
Sl.
No.
I
Name of the Scheme
1.1
1.2
1.3
Hindustan Organic Chemicals Ltd. (HOCL)
Hindustan Insecticides Ltd. (HIL)
Hindustan Flurocarbons Limited (HFL)
II
Support to Autonomous Bodies
2.1
Central Institute of Plastics Engineering &
Technology
Institute of Pesticides Formulation Technology
(IPFT)
2.2
2014-15
proposed
Project Based Support to PSUs
III
Other Ongoing Schemes
3.1
3.2
Assam Gas Cracker Project
Chemical Promotion and Development
Scheme(CPDS)
Chemical Weapons Convention (CWC)
IT/Sectt.
Other New Schemes of Petrochemicals
3.3
3.4
3.5
2014-15 (BE)
Total
60.00
29.00
20.50
0.01
15.00
20.50
110.29
102.98
5.36
5.00
1.00
5.00
0.01
4.30
1.50
0.50
57.50
1.20
0.50
57.50
290.65
207.00
The scheme- wise allocation proposed by the department was Rs.290.65 crores whereas
the budgetary allocation made by the Planning Commission is Rs.207.00 crores.
4.2
As per the Demand for Grants, the budgetary allocation under Plan and Non-Plan under
Major Head and Capital during the year 2013-14 and 2014-15 is given below:(Rs. in crore)
Major Head
Revenue
Capital
Total
4.3
Budget Estimates
2013-14
Plan
Non-Plan
1190.00
142.98
10.00
0.03
1200.00
143.01
Total
1332.98
10.03
1343.01
Plan
1166.96
8.04
1175.00
Revised Estimates
2013-14
Non-Plan
66.28
-66.28
Total
1233.24
8.04
1241.28
Plan
171.49
35.51
207.00
Budget Estimates
2014-15
Non-Plan
63.67
0.01
63.68
Total
235.16
35.52
270.68
The Committee desired to know the reasons for the huge decrease of Plan allocation
under Revenue head from RE 2013-14 (Rs. 1166.96 crore) to BE 2014-15 (Rs. 171.49 crore). In
its written reply, the Department stated as under:
“With the release of Rs. 1000 crore in 2013-14, the Department of Chemicals &
Petrochemicals has released the entire sanctioned amount of capital subsidy of Rs. 4690
crore for AGCP. A token provision of Rs. 0.01 crore has been provided in Budget
Estimates (2014-15). This explains the drop in allocation.”
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4.4
When the Committee asked the Department to give reasons for the sharp increase in
Plan allocation under Capital Head from RE 2013-14 (Rs. 8.04 crore) to BE 2014-15 (Rs. 35.51
crore), the Department in its written reply stated as under:“Plan allocation under capital head are made as per the schemes furnished by CPSEs for
renewal and replacement of plant and machinery, and new projects. It depends on the
requirements made by CPSEs. In 2013-14 funds were allocated for HOCL only as no
demand for plan loan was received from HIL and HFL at BE stage. In case of BE 2014-15,
Plan proposals have been received from HIL for Rs. 15 crore and HFL for Rs 20.50 crore
for refurbishment and new initiatives. Hence, increase in budget allocation for BE 201415.”
4.5
As per the Department’s Demand for Grants 2014-15, Lumpsum Provision for
Project/Scheme for the benefit of the NE Region and Sikkim is as below:MAJOR HEAD 2552
BE
2013-14
Plan NonTotal
Plan
120.00
-120.00
4.6
Plan
117.50
RE
2013-14
NonPlan
--
Total
117.50
(Rs in Crores)
Actual Exp. During RE 201314
Plan
NonTotal
Plan
Plan
117.50
-117.50 31.17
BE
2014-15
NonPlan
--
Total
31.17
When asked to explain the reasons for the sharp drop in allocation under the Major Head
2552 from RE 2013-14 to BE 2014-15, the Department replied in writing as under:“In RE 2013-14, the provision of Rs. 117.50 crore was kept for Assam Gas Cracker
Project, under the “Lump sum Provision for implementing projects/schemes for North
Eastern Region and Sikkim”. The Department of Chemicals & Petrochemicals has
released the entire sanctioned amount of capital subsidy of Rs. 4690 crore for AGCP,
upto 2013-14. A token provision of Rs. 0.01 crore has only been provided in Budget
Estimates (2014-15). The provision of Rs. 31.17 crore in BE 2014-15 under this Head
has now been made for implementation of schemes under CIPET and New Schemes of
Petrochemicals. This explains the drop in allocation from RE 2013-14 to BE 2014-15.”
4.7
When asked to explain the plan of the Department to utilize Rs. 31.17 crore allocated
under this Head for the year 2014-15 and the projects/schemes to be undertaken to benefit the
NE region and Sikkim, the Department replied in writing as under:“The plan for utilization of allocation of Rs. 31.17 crore for the projects/schemes to be
undertaken to benefit the NE region and Sikkim, by the Department, is as under:
(Rs. In crore)
Sl
Name of the Scheme
Allocation
New Schemes of Petrochemicals
1
Setting up of Plastic Parks – Release of 2nd Instalment of Grant-in-Aid for
setting up of plastic park at Tinsukia district, Assam for development of
downstream plastic processing industries.
14.00
2.
Setting up of Centres of Excellence - Release of 2nd Instalment of Grantin-Aid for setting up of CoE for Sustainable Polymers (CoE-SusPol) at
Indian Institute of Technology, Guwahati.
2.00
Sub Total
16.00
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Central Institute of Plastics Engineering & Technology (CIPET)
4.8
1
Creation of Hostel Facilities to augment increase in intake capacity of
existing and new academic programmes at CIPET Centres at Guwahati
and Imphal.
11.00
2
Enriching Technical Infrastructure facilities & capabilities to meet
industry needs at CIPET Centres at Guwahati and Imphal.
4.17
As per the Department’s
Sub Total
15.17
Total
31.17
Demand for Grants 2014-15, the budget proposal under
Investments in Public Enterprises is as under:-
Plan
10.00
4.9
MAJOR HEAD 6857
BE
2013-14
Non-Plan Total
-10.00
Plan
8.04
RE
2013-14
Non-Plan
--
Total
8.04
(Rs in Crores)
BE
2014-15
Plan Non-Plan Total
15.01
-15.01
On being asked about a significant rise in allocation under the scheme from RE 2013-14
to BE 2014-15, the Department in its written reply explained as under:“For growth and development of the CPSEs, during 2014-15, Rs. 35.50 crore has been
allocated as BE in the Budget for Plan Loan Schemes, (MH 6856 and 6857) out of which
Rs.15.00 crore for HIL and Rs.20.50 crore for HFL and a token provision of Rs. 0.01 crore
stands allocated to HOCL. The HFL schemes are for refurbishment and new initiatives,
whereas HIL plan loan is for a new project. It is envisaged that these plan schemes will
support the companies towards further growth.”
4.10
When the Department was asked to elaborate the details of investments made in public
enterprises during the last two years, the Department replied as under:“During 2012-13, Rs.17.60 crore was approved and disbursed for renewal/ replacement
to HOCL and Rs. 4.10 crore was approved for HIL for enhancing capacity of plant. During
2013-14, no approval was received from Ministry of Finance and thus no disbursement
was made to PSUs.”
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CHAPTER V
AUTONOMOUS BODIES
I.
5.1
CENTRAL INSTITUTE OF PLASTIC ENGINEERING AND TECHNOLOGY (CIPET)
CIPET is a premier institution devoted to Academic, Technology Support and Research
(ATR) activities for the growth of Polymer & allied industries in the country. It is an ISO
9001:2008 QMS, NABL, ISO/IEC 17020 accredited national Institution. CIPET has 16 Centers at
23 locations across the country with its Head Office at Chennai. The Centres are:
Centres of CIPET
5.2
As per the Department’s Demand for Grants 2014-15, budget proposal for CIPET is as
below:MAJOR HEAD 2852
BE
2013-14
Plan
Non-Plan
140.96
--
(Rs in Crores)
Total
140.96
RE
2013-14
Plan Non-Plan
140.96
--
Total
140.96
Plan
87.81
BE
2014-15
Non-Plan
--
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Total
87.81
5.3
When asked to explain the steep decrease in allocation under Plan head for CIPET from
RE 2013-14 (Rs. 140.96 crore) to BE 2014-15 (Rs. 87.81 crore), the Department replied in
writing as under:“An allocation of Rs. 280 crore has been provided as Plan assistance for various schemes
to CIPET in 12th Plan period. The major part of implementation of the 12th Plan Schemes
of CIPET especially relating to “Creation of Civil and Technical Infrastructure for
expansion of CIPET Centres”; “Creation of Hostel facilities to augment increase in intake
capacity of the existing and new academic programmes” and “Enriching technical
infrastructure facilities & capabilities to meet industry needs”, was envisaged to be taken
up in the year 2013-14. These schemes require relatively lesser funds in last years of
implementation in 2014-15 and 2015-16. This explains decrease in allocation from RE
2013-14 (Rs. 140.96 crore) to BE 2014-15 (Rs. 87.81 crore).”
5.4
The Committee noted that no allocations have been made under Non-Plan Head for
CIPET in the BE (2013-14), RE (2013-14) and BE (2014-15). In this regard, the Department was
asked to give reasons for the same and the manner in which CIPET will manage its day to day
functioning in the absence of Non-Plan expenditure. In its written reply to this, the Department
stated as under:“CIPET, apart from conducting academic programmes in various areas of polymer
technology, also renders technology support services to the plastics and allied industries
viz. design, tooling, plastic processing & testing, inspection, quality control etc. The
revenue generated through technology support services and fees from academic
programmes (short term and long term) pays for its revenue expenditure. The non plan
support to CIPET was discontinued from 2007- 08. CIPET has been managing its day to
day functioning from the revenue generated through internal resources since then, and
does not depend on Government of India for those expenditures.”
5.5
As per the information provided by the Department, CIPET had fully utilized its fund
allocated to it (Rs. 140.96 crore) during 2013-14. In this regard, the Committee desired to know
the manner in which the amount allocated to CIPET was spent and asked to provide a list of
projects/programmes undertaken by CIPET. In reply thereto, the Department stated in writing
as under:“The details of utilization of amount of Rs 140.96 crore allocated to CIPET during the
year 2013-14 on various projects/programmes are as under:
Sl.
No.
Name of the Scheme
a)
Centre for Bio Polymer Sciences and Technology (CBPST), Kochi
Procurement of machinery/equipment for laboratories
Establishment of Prototype Product Development Centre
b)
Research & Development in emerging areas
Procurement of machinery/equipment for R&D units
Procurement of consumables & raw material, calibration, testing, NABL
accreditation etc.
Expenditure on patent filing/renewal, e-journals and e-books,
international conferences and faculty exchange programmes
Engagement of Research fellows, scholars, scientists etc.
33
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Annual Plan
2013-14
(Rs. in crore)
5.55
3.50
Sl.
No.
Name of the Scheme
Annual Plan
2013-14
(Rs. in crore)
12.80
c)
Creation of civil and technical infrastructure for expansion of CIPET Centres
Construction on classrooms and laboratories at CIPET, Chennai and
Bhubaneshwar
d)
Creation of Hostel Accommodation to augment increase in intake capacity of
existing and new academic programmes
Construction of hostels for students of CIPET centres in 8 States
98.17
e)
Enriching Technical Infrastructure facilities & capabilities to meet industry
needs
Procurement of equipment/machinery for plastic processing, tool room
and design & CAD/CAM/CAE for conducting skill development programmes
at CIPET centres
20.94
TOTAL
5.6
140.96
There is an allocation of Rs. 102.98 crore for CIPET in 2014-15 for its continuing and
new Plan Schemes. This allocation will meet the requirements to provide civil and technical
infrastructure for expansion of CIPET centres, creation of hostel facilities and to augment intake
capacity of existing and new academic and skill development programmes, enriching CIPET’s
capabilities to offer technical support services to plastics and allied industry, undertake
research and development projects in the area of cutting edge technologies and establishment
of Centre for Biopolymer Science and Technology (CBPST) at Kochi to promote environment
friendly plastic technologies. The infrastructure so generated will help in achieving the targets
set for skill development through long term and short term courses during 2014-15.
5.7
When the Committee asked to provide the details of the plan to expand CIPET centres,
the Department in its response stated in writing as under:“CIPET is a premier national institution that caters to Academic, Technology Support and
Research (ATR) activities through its 23 Centres across the country for the growth of
polymer and allied industries in the country. Every year, CIPET trains around 40,000
students through long term professional and short term skill development programme.
CIPET is assigned a target to train 6.20 lakh candidates during the year 2010 to 2022
through skill development training programmes in the area of Polymer Science &
Technology to meet the industry needs. With anticipated growth rate of 8 to 10% in the
plastics processing machinery, there is an increased requirement of skilled manpower to
operate these machineries and lead the industrial growth. In order to meet the
manpower requirements of ever growing polymer and allied industries, CIPET has been
increasing the infrastructure capabilities to augment its intake capacity. New Centres
are also established at different locations of the country, especially near industrial areas,
based on the need for skilled manpower.”
5.8
When the Committee enquired about setting up one CIPET centre in Andhra Pradesh
following the division of
Andhra Pradesh into two States, the representative from the
Department responded as under:
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“ We have plans to expand CIPET centres - one in Hyderabad by way of high learning
centre and vocational training centre and another vocational training centre for
Vijayawada. They are on the cards. It will take some time but we are planning to expand
CIPET centres in both the States.”
5.9
When the Committee pointed out that the market is flooded with Chinese goods and the
manner in which CIPET propose to face the competition, the Department replied in writing as
under:“To meet the needs of plastics and petrochemical sector and allied manufacturing
industries, CIPET is focusing on the following areas to meet the challenges from the
Chinese market:
(i)
Generating industry responsive manpower for all categories of plastic and
petrochemical industries through long term professional and short term
vocational skill development programmes.
(ii)
Providing technical support services in the areas of design and development,
testing and quality control, new and advanced material, new product
development, prototyping and production across a wide range of sectors.
The strengthening of R&D wings of CIPET facilitate indigenization and technology
transfers for the development of different types of products for specific applications so
that the industries will be able to face the challenges posed by imports, including from
China.”
II.
INSTITUTE OF PESTICIDE FORMULATION TECHNOLOGY (IPFT)
5.10
The institute was established in May, 1991 under the aegis of Department of Chemicals
& Petrochemicals, Ministry of Chemicals & Fertilizers, as an autonomous institution for fulfilling
the following objectives:
To develop and produce new pesticide formulation technology that is
environment friendly.
To promote efficient application technologies for newer formulations.
To disseminate information on safe manufacturing practices, quality assurances,
raw material specifications and sources.
To undertake consultancy services and offer analytical solutions for
agrochemicals manufacturers and users.
To nurture talent in pesticide scientists by enhancing their skills through
specialised training and continuing education.
5.11
Since its inception, the Institute has established a healthy rapport with the pesticides
industry and has contributed to the enhancement of indigenous pesticide technologies by
formulating some of the most efficient, economical and environment friendly solutions in the
country. Some of its formulations have seen successful technology transfers for production of
next generation pesticides.
5.12
As per the Department’s Demand for Grants 2014-15, the budget proposal for IPFT is as
under:35
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MAJOR HEAD 2852
BE
2013-14
Plan
Non-Plan
4.34
3.15
5.13
Total
7.49
Plan
4.34
(Rs in Crores)
RE
2013-14
Non-Plan Total
3.80
8.14
Plan
5.00
BE
2014-15
Non-Plan
4.30
Total
9.30
When the Committee enquired about the plans of the Department plans to utilize Rs. 5
crore allocated to IPFT under Plan Head during 2014-15 and the new projects being taken up
by IPFT, the Department replied in writing as under:“The B.E. allocation for 2014-15 under ‘Grants-in-aid General’ is Rs.1.24 crore and
‘Grants for creation of Capital Assets’ is Rs.3.76 crore pertaining to IPFT, totalling Rs.5.00
crore. The projects undertaken in Grant-in-Aid (General) are (i) development of user and
environment friendly water dispersible granule formulation (ii) development of mass
production technique and formulation for baculo viruses (iii) management of termite by
integrated approach (iv) magnetic core-shell nano particles based extraction (v)
pesticides formulation from plant extract and their bio-efficacy studies (vi) manpower
for OPCW project entitled “Development of Recyclable catalytic System based on Nano
particles for treatment of Toxic Effluent generated from Indian Pesticide Industries”.
Grant-in-Aid (Capital Assets) of Rs. 3.76 crore consists of expenditure of Rs. 63 lakh on
Analytical Division, Rs. 120 lakh on Formulation Division, Rs. 48 lakh on Bioscience
Division and Rs. 145 lakh on Pilot Plant Division.”
5.14
The Committee, in their 34th Report (Rec. No. 7), had expressed their desire for IPFT to
reduce their dependence on Non-Plan funds and generate revenues internally and
recommended that measures in this regard be executed expeditiously. On being enquired by
the Committee about the steps taken by IPFT in this regard, the Department in its written
response stated as under:“The findings of the Committee were noted and IPFT has taken steps which have
resulted in increased revenue generation during last five years. IPFT has made efforts to
reduce their dependence on Non-Plan funds and generate revenue internally by taking a
number of measures like (i) interaction with agro-chemical industries to get more
projects (ii) becoming Proficiency Test (PT) provider for pesticide formulations (iii)
preparation of certified reference materials for pesticides (iv) creation of GLP certified
lab for testing of agrochemicals (v) establishment of study center for Analytical
Techniques through IGNOU (vi) renovation of pilot plant. The above measures have
resulted in increased revenue generation during last five years from Rs. 49 lakh in 200910 to Rs. 155 lakh in 2013-14.”
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CHAPTER VI
PUBLIC SECTOR UNDERTAKINGS (PSUs)
I.
Hindustan Organic Chemicals Limited (HOCL)
6.1
Hindustan Organic Chemicals Limited (HOCL) was incorporated on 12th December,
1960 as a Government company with the objective of setting up manufacturing capacities for
chemicals/ intermediates which are required for production of dyes, dye-intermediates, rubber
chemicals, pesticides, drugs and pharmaceuticals, laminates etc. The products manufactured by
HOCL include phenol, acetone, formaldehyde, nitrobenzene, aniline, nitro-toluene, nitric acid,
di-nitrogen tetra-oxide (N2O4) and hydrogen peroxide. The raw materials used by HOCL are
benzene, toluene, LPG, methanol, CNG and sulphur, most of which come from petroleum
refineries. HOCL is the only manufacturer of liquid rocket propellant N2O4 in the country,
supplying to ISRO. HOCL now has 58.78% Government shareholding.
6.2
HOCL has two units, located at Rasayani (Maharashtra) and Kochi (Kerala). It also has a
subsidiary company, viz. Hindustan Fluorocarbons Limited (HFL), located at Rudraram, Medak
(Andhra Pradesh) which manufactures Poly-Tetra-Fluoro- Ethylene (PTFE), a high- technology
engineering plastic.
6.3
The company was referred to Board for Industrial and Financial Reconstruction (BIFR)
in February, 2005 and based on the recommendations of Board for Reconstruction of Public
Sector Enterprises (BRPSE), Government approved a Revival Package on 09.03.2006, providing
cash infusion of Rs.250 crore in the form of 8% Redeemable Non-Cumulative Preference Shares
for repayment of high cost overdue Bonds for payment of VRS and waiver of penal interest and
interest on interest up to 31.03.2005 and continuation of Government of India Guarantee of
Rs.100 crore for full term of 10 years to be utilised to liquidate high cost debt. With this
financial restructuring, the net-worth of the company became positive and BIFR discharged the
company from the purview of Sick Industrial Companies (Special Provisions) Act, 1985 in 2008.
6.4
During the past few years, the company started making losses again and considering the
precarious financial position of HOCL, the Cabinet Committee on Economic Affairs (CCEA) in
August 2013 approved to postpone the redemption of Rs.250 crore Preference Shares, which
was due from 2011-12, by another 4 years (i.e. to begin from 2015-16), and to renew the
Government Guarantee of Rs.100 crore up to August 2017. Subsequently, as the net worth of
the company became negative due to continuous losses, HOCL filed application to BIFR on 27
November, 2013.
6.5
The physical and financial performance of the Company during the last five years has
been as follows:
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Performance of HOCL
6.6
The sales/turnover of the company decreased from Rs.624.19 crore in 2012-13 to Rs.
237.20 crore in 2013-14 resulting in a net loss of Rs.176.85 crore. In view of this, the Committee
asked the Department to explain the main reasons for this poor performance and highlight the
measures taken to take the company to the growth path. In its written reply, the Department
stated as under:“i)
The major reasons for the poor financial condition of HOCL are the uneconomic
small capacity of its plants, obsolete technology and excessive manpower and
dumping of its main products. During the ‘Sunset Review’, ADD was withdrawn
from April 2012 onwards on import of phenol from USA, Taiwan, Singapore and
European Union, and for import of acetone from Taiwan and Saudi Arabia. With
the withdrawal of ADD, HOCL suffered high losses in 2012-13 and 2013-14 on
account of cheaper imports and high raw material cost, which adversely affected
the overall performance of the company.
The company had been referred to BIFR on 27 November 2013 due to total
erosion of the net-worth. M/s FACT Engineering & Design Organization (FEDO)
has been engaged to conduct a revival study and they have submitted a report to
HOCL.
ii)
Ministry of Finance vide their OM dt.23.07.2014 have approved provision of
Government Guarantee amounting to Rs. 150 crore to raise Non-Convertible
Debenture in the nature of Bonds and the company is raising money against this
Guarantee, to be utilised mainly for running the plants .
Action will be taken as decided by Government on the FEDO study.
6.7
HOCL was allocated a budget of Rs 10 crore in 2013-14 as Plan loan which was reduced
to Rs 8.04 crore in RE. This could not be released as HOCL was not sanctioned the loan. During
2014-15, a token provision of Rs. 0.01 crore has been made for HOCL.
6.8
On being enquired by the Committee as to why the Plan Loan of Rs. 8.04 for 2013-14
could not be sanctioned, the Department in its written reply stated as under:“Rs. 10 crore was allocated for HOCL at BE stage which was subsequently reduced to Rs.
8.04 crore at RE stage and the same could not be released as no approval was received
from MoF as well as Planning Commission”.
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6.9
When the Committee asked about the measures being undertaken to ensure that such
instances do not recur in future, the Department stated in writing as under:“All out efforts are made through close coordination for ‘in-principle’ approval of the
schemes by the Planning Commission, as well as approval for fund release/disbursal by
the Ministry of Finance. A number of meetings are held with both these organizations to
clarify the issues further for this purpose.”
6.10
In their study visit to HOCL units in Mumbai on 10 November, 2011, the Committee had
observed that plants producing chemicals viz. MCB, MOB and Aectanilicide which are not
operating for the last 10-15 years and cannot be revived should be closed and dismantled.
When the Committee desired to know about the follow up actions taken in this regard, the
Department in its written response stated as under:“The company has already taken action for disposal of idle/non-operating plants
through E-auction conducted by M/s Metal Scrap Trade Corporation limited (MSTC) a
PSU. Accordingly, Rs. 12.51 crore was realised in the year 2013-14. Subsequently few
more idle/obsolete plants were disposed in the month August 2014 realising an amount
of Rs. 3.71 crore.”
6.11
On being enquired by the Committee about the present status of HOCL and its revival the
Secretary of the Department of Chemicals and Petrochemicals during evidence explained as
under:“For Cochin unit, the Government has sanctioned a grant of Rs.150 crore. Now the
Cochin unit has started working.”
Regarding Rasayani plant, Chairman, HOCL added as under:"We have got the Government guarantee of Rs.150 crore. We have cleared the dues to
the raw material suppliers. We have already started one unit. We are going to start the
production of the next unit of Rasayani. We are going to start the production. One plant
has already started. We are going to start the other two plants. But the revival of that
unit requires major investment because the present plants are uneconomical because of
the smaller size. These are all not world class plants. We are not able to compete with
the importers in the products. We are looking forward for larger investment in joint
venture or by way of foreign investment. We have got lot of land there. We have to utilise
that land. We are looking for joint ventures.”
Chairman, HOCL further added as under:“We have made a revival plan by one of the consultants. We will be going ahead with
their recommendations. In those recommendations, joint ventures, mergers and maybe
private participation is also there. So, we are on the verge of doing all those things."
In this context, the witness from the Department also added as under:"I would like to add a little bit more. This Rasayani unit is having a land bank of 1016
acres out of which hardly 300 acres have been utilised. The Rashtriya Chemicals and
Fertilisers which produces some chemicals and they are interested in an investment of
Rs.200 crore. It may be more also but at this moment they have agreed for an investment
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of Rs.200 crore. They are asking them to prepare a DPR and they wanted to support this
industry. That is one aspect. Secondly, the Narmada Fertilisers Plant in Gujarat wanted
that an aniline plant may also be set up in the Rasayani unit. They have also agreed to
invest Rs.200 crore. That makes it Rs.400 crore.
The major thing is the manpower. Some mistakes have rolled in unnecessarily on
account of manpower management. Now we are going in for voluntary retirement of
surplus staff. Once the excess labour goes off, the unit will reach break even also. And
CONCOR is interested in some 60 to 70 acres of land for which they are ready to pay
Rs.70 crore upfront and give some share in business annually. Similarly BCPL is also
interested in taking some land to set up their bottling plant. They are ready to pay
Rs.120 crore. HOCL are having serious liabilities. If the management determines to
revive this unit, things will be alright. Now they have started one plant and there are two
more plants yet to start Viz nitrobenzene, formaldehyde and aniline.
Also, the Rasayani unit is supplying Dinitrogen tetroxide to ISRO. For Chandrayan and
other things they are supplying the chemical. They are also ready to invest some money.
They are asking to set up one unit in ISRO. These are the latest developments. The
Ministry is making all efforts to revive this unit. But it needs a lot of determination and a
lot of investment. Things will be streamlined in the near future.”
6.12
When the Committee further asked
about the status of progress made in the
restructuring.revival plan of HOCL, the Department in a written reply stated as under:“As on 31.03.2013, the Net Worth of the HOCL eroded to Rs. (-) 131.15 crore and as a
result, the company was referred to BIFR. Subsequently, M/s FACT Engineering &
Design Organization (FEDO) was engaged to conduct a revival/ restructuring study.
FEDO has submitted a draft report to HOCL, the revival plan will be submitted to BIFR
for further action in the matter after the approval.
After the revival / restructuring of HOCL, it is envisaged that the company will be able to
sustain on its own and make profit which will wipe out its accumulated losses and make
its net worth positive in due course.”
6.13
On the issue of plans to utilize vacant land available at Rasayani, the Department
furnished in a written reply furnished the following information:“The status in this regard is as follows:
Firstly, M/s Container Corporation of Indian Ltd. ( CONCOR), a Government of India
Undertaking under Ministry of Railways, has submitted a proposal to HOCL for long
lease of 60 acres of HOCL Rasayani for development of Multi Modal Logistic Park
(MMLP). The proposal is being examined for taking further action, before seeking
approval of Ministry of Finance.
Secondly, the company proposes to dispose of 8 acres of land at Panvel for which
approval of the Government of India and Maharashtra has been sought.”
II.
Hindustan Fluorocarbons Limited (HFL)
6.14
Hindustan Fluorocarbons Limited (HFL), a subsidiary company of Hindustan Organic
Chemicals Limited (HOCL), was incorporated on 14.07.1983. The company is engaged in the
manufacture of Poly Tetra Fluoro Ethylene (PTFE) and Chloro Di Fluoro Methane (CFM-22).
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PTFE is extensively used in chemical, mechanical, electrical and electronic industries and has
strategic applications in defence and aerospace sector. The factory is located at Rudraram,
District Medak, in Andhra Pradesh.
6.15 The company was earlier under BIFR. The Rehabilitation package under the operating
agency M/s. IDBI was approved by BIFR on 03.12.2007 and implementation has been
completed. The company has diversified into profitable business of fluoro specialty chemicals
and also developed fluoro specialty chemicals like TFE-Ether for the first time in India and has
been successfully selling them. The quality of all products of the company continues to be well
accepted by customers
6.16 The physical and financial performance of the Company over the last five years has been
as follows:Performance of HFL
6.17
HFL has undertaken the development of specialised PTFE, i.e. modified PTFE and the
company proposes to manufacture this product in the existing system with some modifications.
At present modified PTFE is being imported, but it has wide market potential owing to its
versatile applications. The company has plans to take up the following projects:
Proposed projects of HFL
6.18
On being enquired by the Committee about the reasons which led to sickness of the
company, the Department in its written reply stated as under:41
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“Hindustan Fluorocarbons Ltd. (HFL) was promoted by Hindustan Organic Chemicals
Ltd. (HOCL) in 1983 as a subsidiary for manufacturing Poly Tetra Fluoro Ethylene
(PTFE) with an installed capacity of 500 TPA and Chloro Di Fluoro Methane (CFM22)
with an installed capacity of 1265 TPA in Medak District of the then Andhra Pradesh,
presently Telangana.
The company has been incurring losses due to low sales realization, high material cost,
high interest, depreciation burden and uneconomical plant size. The aggregate losses
have, over a period of time, eroded the company’s net worth. Consequent upon the
complete erosion of net worth, HFL was declared a sick industrial company under Sick
Industrial Companies (Special Provisions) Act, 1985 in 1994.”
6.19
When asked to elaborate the action plan of the Department to revive HFL, the
Department replied in writing as under:“A rehabilitation package for HFL was approved by BIFR in December 2007. The Board,
after detailed deliberations, recommended that the fresh funds, required for revival of
the company, may be arranged by HOCL from own resources / or through banks/
financial institutions. All dues of Financial Institutions had been settled under One Time
Settlement (OTS) and the interest, thereon, had been waived off by all the Financial
Institutions (FIs). The charge on assets of HFL, has been released by the FIs. The
company has undertaken a project of Clean Development Mechanism (CDM) for which
statutory approval and registration from United Nations Framework Convention on
Climate Change (UNFCC)has been obtained on 14.11.08. In the revival plan, while
making profitability projections, major income was envisaged from CDM Project. The
total income was projected as Rs. 107.85 crore against which only Rs. 23.15 crore was
realized. This is mainly due to adverse developments in the international market of CDM
business related to R-23 gas. Due to this adverse development, CDM income stopped
since 2013.
Simultaneously, the company started various new initiatives along with the
implementation of revival package with the result company has made profits from 200809 to 2012-13. This is mainly due to the following reasons:
a)
Company initiated development of fluoro speciality chemicals. Accordingly, for
the first time in India, company developed Tetra Fluoro Ethylene Ether (TFEEther).
b)
Improvement in operational efficiencies by reducing specific consumption, raw
material and utilities.
c)
Company has decided to implement few projects and refurbishment activity, so
that it will improve the operational efficiency of new products will be added
wherein profit margins are more.
All out efforts are being made to revive HFL, and accordingly, an amount of Rs. 3.60
crore for Modified PTFE project has been released recently and the project is under
implementation. Further, the company has submitted refurbishment plans and small
projects of Rs. 20.50 crore for undertaking in 2014-15. Against this proposal, Planning
Commission has accorded ‘in principle’ approval for Rs.13.20 crore and the same is
under disbursement. These activities are envisaged to enable HFL to revive and achieve
positive net-worth.”
6.20
When the Committee enquired as to whether any timelines have been set to plan the
revival of HFL, the Department replied in writing as under:-
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“All out efforts are being made to revive HFL and accordingly an amount of Rs.3.60 crore
for Modified PTFE (M-PTFE) has been released this year and action for release of Rs.
13.20 crore for various refurbishment schemes and new activities is under progress. It
is, therefore, expected that the company will start making profits after implementation
of the above Plan projects.”
III.
HINDUSTAN INSECTICIDES LTD. (HIL)
6.21
Hindustan Insecticides Limited (HIL) was incorporated in March, 1954 for manufacture
and supply of DDT. In 1957, the company set up a factory at Udyogamandal near Kochi for
manufacture of DDT and in 1977 at Rasayani, Maharashtra for manufacture of Malathion, an
insecticide. Today, HIL has three units located at Udyogamandal in Kerala, Rasayani in
Maharashtra and at Bathinda in Punjab.
6.22
DDT accounts for almost 47%-48% of turnover of the company and is supplied only to
the National Vector Borne Disease Control Programme in India. The Company has now emerged
as the leading supplier of DDT globally.
6.23
HIL diversified into agro-chemicals in the late seventies to ensure supply of quality
pesticides at reasonable prices to the agriculture sector. To further consolidate its position, one
new thrust area recently identified is the seed business. Ministry of Agriculture, Government of
India, has given recognition to HIL as a nodal agency for production and marketing of certifi ed
seeds for crops and vegetables. The groundwork has already been done to transform HIL into a
one stop shop to the farmer i.e. providing two critical agricultural inputs-seeds and pesticide.
The performance of the company over the last 5 years is as follow:
6.24
During 2012-13, HIL was allocated Rs 14 crore for investment in enhancing the capacity
of existing Mancozeb Plant at Udyogmandal. The budget allocation was reduced to Rs 4.10 crore
in RE and the same was released. Mechanical work is nearing completion and production is
likely to start by March, 2015. Further, during 2013-14, HIL was not allocated any budgetary
support. HIL’s proposal for allocation of Rs. 4 crore was approved by Planning Commission but
the amount could not be released as re-appropriation of funds was not approved by the
Ministry of Finance.
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6.25
On being asked by the Committee to provide a status report on the Mancozeb Plant at
Udyogmandal which is under construction, the Department in its written response stated as
under:“The status of the Mancozeb Plant is as follows:
Civil structure works is in progress and is expected to be completed by December,
2014 and by that time all required equipment are planned to be procured. The
unit has already placed orders for most of the equipment.
Equipment erection works, along with piping and electrical works, will start in
parallel after completion of civil works.”
6.26 According to the Department, HIL has taken an initiative to develop a new product to be
used as an Indoor Residual Spray, as an alternative to DDT. The new molecule is expected to be
a major breakthrough in vector control.
6.27
On being asked by the Committee to furnish a detailed status report on the progress
made in this venture, the Department in its written reply stated as under:“Institute of Chemical Technology (ICT), Mumbai after detailed literature survey for the
synthesis of the new molecule, has started lab studies for development of isostere of
DDT. They have developed a lab sample of the new chemical and the same is being sent
to a lab to assess its insecticidal properties. Once the insecticidal property is proved,
chemical assay, toxicology and other studies will be undertaken. After the chemistry is
established, a pilot plant will be designed and on satisfactory pilot plant studies, which
will also establish the economic feasibility, the scaling up activities will commence.”
6.28
During the study visit of the Committee on 4 July, 2012, at Kochi, Kerala, the Committee
were apprised that due to limited order for manufacturing of DDT from the Ministry of Health,
the full capacity of DDT plant was not utilized. The Committee were apprised that in order to
utilize the full capacity of DDT plant, avenues were being explored for export of DDT to
Zimbabwe, South Africa and Namibia/Botswana. In this regard, the Committee asked the
Department about the progress made on the issue. In its response, the Department stated in
writing as under:“The status in this regard is as follows:
DDT plant being old and vintage cannot be used to manufacture any other
product. It also cannot be retrofitted to manufacture any other product. The
company started export of DDT to Zimbabwe, South Africa and Namibia from its
Rasayani factory.
The total quantity of DDT exported during 2012-13 is around 381 MT, and during
2013-14 is around 102 MT.”
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CHAPTER VII
OTHER ONGOING SCHEMES
(A)
ASSAM GAS CRACKER PROJECT (AGCP)
7.1
The Assam Gas Cracker Project was initiated in pursuance of the Memorandum of
Settlement signed between Central Government, All Assam Students Union (AASU) and All
Assam Gana Parishad (AAGP) on 15th August 1985. This project is of economic significance for
the State of Assam and the North East Region. Cabinet Committee on Economic Affairs (CCEA),
in its meeting held on 18th April, 2006, approved the setting up of the Assam Gas Cracker
Project at a Project cost of Rs.5460.61 crore. A joint venture company namely Brahamaputra
Cracker & Polymer Limited (BCPL), is implementing the project. Owing to various reasons, the
project has witnessed cost and time verruns. The revised cost estimate of Rs.8920 crore (on “as
built basis”) was approved by the CCEA on 16th November, 2011 with revised mechanical
completion by July, 2013 and commissioning by December, 2013.
7.2
As on 15th March, 2014, the overall physical progress was 96.3% and the cumulative
capital expenditure incurred, was Rs.7,233 crore i.e. 81.10%. The Department has released
Capital Subsidy amounting to Rs.4,690 crore to BPCL. The pre-commissioning activities in
several units are in progress.
7.3
The following table, according to the Department, indicates the subsidies proposed for
the Assam Gas Cracker Project (AGCP):
(MAJOR HEAD 2852)
BE
2013-14
Plan
Non-Plan
880.00
0.01
7.4
(Rs in Crores)
Total
880.01
RE
2013-14
Plan Non-Plan
859.46
0.01
Total
859.47
Plan
0.01
BE
2014-15
Non-Plan
0.01
Total
0.02
When the Committee enquired about the reasons for the steep drop in allocation under
Plan Head from RE 2013-14 (Rs. 859.46 crore) to BE 2014-15 (Rs. 0.01 crore), the Department
in its written reply stated as under:“With the release of Rs. 1000 crore in 2013-14, the Department of Chemicals &
Petrochemicals had released the entire sanctioned amount of capital subsidy of Rs. 4690
crore for AGCP. A token provision of Rs. 0.01 crore has been provided in Budget
Estimates (2014-15). This explains the drop in allocation.”
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7.5
When the Committee enquired about the elaborate measures taken to ensure that
project is commissioned as per the revised schedule of September 2014, the Department in its
response in writing stated as under:
“The schedule for commissioning has been further revised to June, 2015. The following
measures are being taken at various levels to ensure that the project is completed within
the revised schedule:
1. Regular reviews at the level of Chairman &Managing Director, BCPL and Secretary
(C&PC) including site visits.
2. Monitoring of projects in concert with Project Management Consultant, i.e., M/s EIL
for effective strategies to address the backlog in construction and achievement of
committed target dates.
3. Rigorous monitoring of all contracting and delivery activities for expeditions decision
making.
4. Extending financial assistance to the contractors facing financial crunch and
offloading work of the non performing agencies.
5. Day to day supervision of pre-commissioning activities to prune the time period of
pre-commissioning/commissioning activities.
6. Close liasioning with Ministry of Environment & Forests (MoE&F) to facilitate
environment clearances and Ministry of Petroleum & Natural Gas (MoPNG) for
effective steps to ensure EIL and GAIL commit and provide priority and enhanced
synergy for the project.
7. Close liasioning with state/District authorities to address the issues concerning
safety, security and local issues.
8. Close liasioning with all stakeholders to avoid hold up for requisite funding for the
project.
9. Augumentation of the recruitment of BCPL manpower including availability of
experienced manpower by GAIL for expediting the execution.
7.6
On being enquired about the details of employment generated so far by the project in
terms of direct and indirect employment and the estimated number of employments to be
generated on its completion, the Department replied in writing as under:“The total employees on the rolls of BCPL on date are 394. The total estimated
employees on completion of the project are expected to be 685. Further, approximately
5000 number of workers have been employed by contractors during various stages of
construction of the project since 2009 onwards. In addition, 1000 to 1,200 workers are
expected to be deployed on contract for operation, maintenance, housekeeping, loading
and unloading, civil and horticulture and other related jobs. The project will lead to
setting up of plastic processing units in the neighbouring areas. Consequently,
substantial employment is envisaged to be generated on its completion.“
7.7
On the issue of employment of local people in AGCP and the requisite training for the
purpose, the Secretary of the Department of Chemicals and Petrochemicals elaborated during
the evidence as under:46
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“It is a very valid question and the Department is also fully seized with the issue at the
moment, our polymer production, ethylene and propylene, will be around 2,80,000
tonnes.. We also requested the Government of Assam to put a plastic park where it
should be consumed. Now, the Government of Assam has chosen Tinsukia. So, there is a
concern that Tinsukia Plastic Park might not be able to consume so much of feedstock.
So, last week I met the Chief Secretary of Assam and requested him that there should be
a bigger park in Guwahati because the main consumption and trading area is Guwahati.
If they produce it in Tinsukia, then they have to transport it to Guwahati, and in this type
of commodities, transportation cost is a big competitive disadvantage and the Chief
Secretary also promised me that he will take it up with the Government.
In addition to that, in fact, we are chalking out a programme. It is at a very active
discussion stage. We should go and advocate these plastic parks in the nearby NorthEastern States because it is a big plant compared to the local conditions and so much of
feedstock, which will be coming out of this plant, cannot be used in Assam alone. So, it is
basically meant to help even other nearby States also. So, we are planning workshops
and meetings with all the nearby North-Eastern States. Also, we have been requesting
the CIPET that before we do that, simultaneously we should also do the skill
development programme for all these States so that the children, those who get the
skills, will either put their own shop or they will get employed by some major industries.
Our experience is that we have a Plastic Training Centre in Guwahati. The children are
coming from all over the North-East. There is a six-month duration course for 10th
passed children and there is a one-and-a-half years course for graduates. Almost all the
children are getting placements. Therefore, in addition to that, the per capita
consumption of plastic in North-East is only two kilograms and for the rest of India, it is
10 kilograms. So, there is a huge scope for development of this industry in the NorthEastern States and the Department is chalking out a programme to push it. We have
already done some activities but we did not get good response. We want to go more
vigorously also through the DoNER.”
(B)
7.8
CHEMICAL WEAPONS CONVENTION (CWC)
The Chemical Weapons Convention (CWC) is a universal nondiscriminatory, multilateral,
Disarmament Treaty, which bans the development, production, acquisition, transfer, use and
stockpile of all chemical weapons. The Organisation for the Prohibition of Chemical Weapons
(OPCW) at The Hague, The Netherlands, is implementing the provisions of the Convention. It
has 190 States as its Members as on 31.03. 2014. India, with a well developed chemical
industry, is also a party to this treaty. Department of Chemicals & Petrochemicals is the
administrative Department for the CWC Act, 2000, which is in force in the country. DCPC is
responsible for chemical industry related matters and more specifically preparation of
declarations and facilitation of inspections of chemical plant sites by OPCW teams.
7.9
Inspection of chemical plant sites covered under the Convention is routinely conducted
by the Organisation for Prohibition of Chemical Weapons (OPCW) to ensure that the activities
in scheduled and unscheduled chemicals are in accordance with the provisions of the
Convention. India has so far received a total 165 industry inspections as on 31.03.2014.
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7.10
The Department has set up 6 Help Desks in PPP mode in association with the Indian
Chemical Council (ICC) at places with concentration of chemical industry of relevance to CWC,
for facilitating compliance by the chemical industry in its obligation under CWC. These Help
Desks have the following locations and coverage:
Location
Area covered
Hyderabad
Andhra Pradesh, Orissa, Chhattisgarh.
Kolkata
West Bengal, Bihar, Jharkhand and North Eastern Region.
Delhi
Mumbai
Uttar Pradesh, Himachal Pradesh, Haryana,
Chandigarh, Uttarakhand and Jammu and Kashmir.
Maharashtra, Goa.
Chennai
Tamil Nadu, Kerala and Karnataka.
Vadodara
Gujarat, Rajasthan, Madhya Pradesh.
Punjab,
The Help Desks undertake the following activities:
i.
Disseminate information on CWC and the obligations of the chemical industry,
under the CWC Act.
ii.
Identification of new units, which are potential declarants, through industry
surveys and facilitate their filing of declarations.
iii.
Assist the industrial units covered under the Convention in filing declarations as
stipulated under the CWC Act.
iv.
Conducting awareness programs-15 awareness programs have been conducted
during 2013-14.
There is an allocation of Rs. 1.20 crore for CWC in 2014-15 for the above activities.
7.11
The following table indicates the budgetary allocation for the Chemical Weapons
Convention (CWC):MAJOR HEAD 2852
BE
2013-14
Plan
Non-Plan
1.50
0.01
7.12
(Rs in Crores)
Total
1.51
Plan
1.50
RE
2013-14
Non-Plan
0.01
Total
1.51
Plan
1.20
BE
2014-15
Non-Plan
0.01
Total
1.21
As per the Notes on Demands for Grants 2014-15, in order to discharge the obligation of
the Convention, a nodal agency called National Authority has been set up in India. When the
Department was asked also as to whether the allocation of Rs. 1.20 crore would be adequate
for the National Authority to carry out its activities during the year 2014-15, the Department in
its written reply submitted as under:“The National Authority for Chemical Weapons Convention (NACWC) has been set up as
an office of the Cabinet Secretariat, to fulfill, on behalf of the Government of India, the
obligations under the Chemical Weapons Convention and to act as the national focal
point for effective liaison with the Organisation for the Prohibition of Chemical Weapons
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(OPCW) and other State Parties on matters relating to the Convention. NACWC has its
separate budget allocation under the Cabinet Secretariat. The budget allocation (under
Plan Head) of CWC in D/o Chemicals and Petrochemicals is utilized for meeting the cost
of CWC Help Desks, holding of various awareness programmes for implementation of
the Convention, etc.”
7.13
When the Committee enquired about the various activities undertaken by the National
Authority during the last one year and asked the Department to elaborate the major findings
during its trial inspections of chemical plant sites under CWC during the said period,
the
Department in its written reply stated as under:“NACWC is under the Cabinet Secretariat. During 2013, 26 inspections were successfully
conducted. The Annual Declaration of Past Activities (ADPA) and Annual Declaration of
Anticipated Activities (ADAA) filed by relevant chemical industries, which were
prepared and compiled in DCPC, were forwarded to the OPCW by NACWC, in compliance
of obligation under the Convention. The NACWC Chairman and Officers participated in
the 4 Executive Council meetings and 1 Conference of State Parties (CSP) held in The
Hague, the Netherlands during 2013.”
7.14 When the Department was asked to elaborate the various activities and awareness
programmes planned for the year 2014-15, the Department in its written reply stated as
under:“The Department in consultation with ICC has approved a calendar of 15 CWC
Awareness Programmes. In addition, the Department has also planned to hold, in
collaboration with ICC, five more workshops on various issues pertaining to CWC at
different venues, with active participation of stakeholders including Ministries and
Industry.”
(C)
CHEMICAL PROMOTION AND DEVELOPMENT SCHEME (CPDS)
7.15
The details of the budgetary allocation for the Chemical Promotion and Development
Scheme (CPDS) are as under:MAJOR HEAD 2852
BE
2013-14
Plan
Non-Plan Total
3.00
7.16
--
3.00
Plan
3.00
(Rs in Crores)
RE
2013-14
Non-Plan Total
Plan
--
3.00
4.30
BE
2014-15
NonPlan
--
Total
4.30
An allocation of Rs. 4.30 crore has been made for undertaking various promotional
activities for chemical and petrochemical industry, viz:
i)
Promotion of chemical industry by organizing India Chem events. These events
are undertaken in association with FICCI once in two years. So far, seven such
events have been undertaken and the next event will be held during 9th to 11th
October, 2014 at Mumbai.
The Department will supplement the efforts of the industry associations for
holding both domestic and international seminars/conferences etc. for the
promotion and development of chemicals as well as petrochemicals. This will
include road shows in countries with developed chemical industry as also those
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having good market potential for Indian industry. International Buyer-Seller Meet
is also envisaged.
ii)
7.17
Action will also be taken to promote PCPIRs. Promotional activities for the
promotion of chemical/plastic hubs will also be undertaken.
When the Department was asked to justify the increase in budgetary allocation for the
Scheme from RE 2013-14 (Rs. 3.00 crore) to BE 2014-15 (Rs. 4.30 crore) and elaborate the
various promotional activities/programmes to be undertaken during the year 2014-15, the
Committee were informed in writing as under:“During the current financial year 2014-15, in addition to providing grant/financial
support for organization of seminars, workshops, events to be held for promotion of
Indian Chemical and Petrochemical Industry, certain new programmes have been
proposed to be under taken in association with Industry Associations. These are
conferences on Health, Safety, Security and Environment (HSSE), workshops on
Chemical Safety and Security Rating System, India Chem 2014, workshops on Green
Chemistry, new studies on HSSE in MSME sector. Hence, there is an increase in budget
allocation.”
7.18
When the Department was asked to provide details of all activities like seminars,
workshops, etc. undertaken by the Department under the scheme during the last one year and
the funds spent thereon, the Department has furnished in writing the details of all activities
undertaken as given in the Annexture.
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CHAPTER VIII
PETROLEUM, CHEMICALS AND PETROCHEMICALS INVESTMENT REGIONS (PCPIRs)
8.1
The concept of Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs)
is a cluster approach to promote the Petroleum, Chemical and Petrochemical sectors in an
integrated and environmental friendly manner, on a large scale. The Government of India
formulated the PCPIR policy in April 2007 to give a boost to this sector. This policy was an
initiative to cater to the evolving needs of the industry. Such integrated PCPIRs were envisioned
to reap the benefits of co-siting, networking and greater efficiencies through use of common
infrastructure and support services.
8.2
The policy provides that each PCPIR would have a refinery / petrochemical feedstock
company as an Anchor Tenant. Government of India will ensure availability of external physical
infrastructure linkages to the PCPIR including connectivity through Railways, Roads, Ports,
Airports and Telecom. This infrastructure is created or upgraded, through Public Private
Partnership projects to the extent possible. The Central Government also provides necessary
funding to make such projects viable, called Viability Gap Funding (VGF), as well as budget
support for creation of these linkages.
8.3
In their 34th and 40th Reports, the Committee had expressed concern over the slow pace
of progress in the implementation of PCPIRs in the country and recommended that utmost
importance and priority be given for execution of PCPIR projects and periodic reviews be
undertaken at the highest level. In this regard, the Department in its written reply commented
as under:“The infrastructure development, environmental clearances and investments by Anchor
Tenant are highly capital intensive and have long gestation periods. These require a
number of activities and approval from the planning stage to execution. Department is
taking all necessary steps to speed up the implementation. The Anchor Tenant’s
investment proposals were delayed also due to economic conditions domestically as
well globally. In order to review the progress of PCPIR projects, a monitoring mechanism
is put in place in the Department of Chemicals and Petrochemicals in form of Steering
Committees. In addition site visits are also undertaken. The status of the PCPIRs, in brief,
is as follows, as on 31st March, 2014:
Indicator
Gujarat
Andhra Pradesh
Odisha
Tamil Nadu
Location/ Region
Dahej, Bharuch
Vishakhapatnam –
Kakinada
Paradeep
CuddaloreNagapattinam
Feb, 2009
Feb, 2009
Dec, 2010
July, 2012
07.01.2010
01.10.2009
03.11.2011
20.02.2014
Total Area (Sq. kms.)
453
603.58
284.15
256.83
Processing Area
(Sq.kms.)
248
270
123
104
Date of Approval
Date of MoA
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Indicator
Anchor Tenant
Gujarat
Andhra Pradesh
Odisha
Tamil Nadu
ONGC Petroleum
addition Limited
Indian Oil
Corporation
Ltd. (IOCL)
Nagarjuna Oil
Corporation Ltd.
(NOCL)
15 (Greenfield
refinery)
12
(refinery)
Refinery / Cracker
capacity in MMTPA
Cracker:
Ethylene: 1.1
Propylene: 0.6
Hindustan
Petroleum
Corporation Ltd.
(HPCL)
9.3 to 15 (expansion
of existing refinery)
15 (Greenfield)
Total amount of
infrastructure
projects approved
(Rs. crore)*
GoI share in form of
VGF (Rs. crore)*
7749.70
19031.00
13634.00
13354.00
80.50
1206.80
716.00
Proposed Investment
(Rs. Crore)*
50,000
3,43,000
2,77,734
1143.00
1500 .00
(budgetary
support)
92,160
Investment made
(Rs. Crore)
Projected
employment
(number)*
Employment
generated (number)
69,621
36,186
34,730
7,430
8,00,000
11,98,000
6,48,000
7,50,000
78,000
92,000
38,000
13,950
* At approval stage of the projects.
8.4
On being asked about the initiatives undertaken by the Department in the light of the
Committee’s recommendations, the Department in its written reply stated as under:“Department of Chemicals & Petrochemicals reviews the projects under the
Chairmanship of Secretary (C & PC). Representatives from State Government, Anchor
Tenants and the Central Ministries / Departments concerned take part in the review
meetings. During the meetings issues are discussed and resolved through a consultation
process. The Department has also constituted a Steering Committee for each of the
PCPIRs (excluding Tamil Nadu), to monitor the implementation progress. As part of
initiatives an independent evaluation of Dahej PCPIR in Gujarat has been conducted
during 2013-14 and final Evaluation Report has been received with recommendations in
August, 2014. This will help in expediting the implementation of various projects in the
PCPIR. Recently Minister of Petroleum and Natural Gas, while reviewing the Paradeep
refinery complex of IOCL, has formed a Group of Senior Officers to prepare a roadmap
for development of downstream industry in Paradeep PCPIR. In case of Tamil Nadu, the
Department has signed Memorandum of Agreement with Government of Tamil Nadu in
February 2014.”
While briefing the Committee about PCPIR, the Secretary of the Department stated as
under:
“….At the moment, the major policy decision which the Department has taken is the
promotion of Petrochemicals, Chemicals and Petroleum Investment Regions. The
Government has already sanctioned four regions. The total area of the region should not
be less than 250 square kilometers. It will be an integrated area, planned area where all
chemicals, petro chemicals and petroleum activities will be permitted. There will be one
anchor tenant. He will supply the basic feed stock. There will be downstream industries
and the Government will provide the infrastructure. Now the Government has
sanctioned four PCPIRs. They are Dahej in Gujarat, Paradip in Odisha, Vishakapatnam52
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Kakinada in Andhra Pradesh and recently it has been sanctioned in Tamil NaduCuddalore, Nagapattinam. The PCPIRs- Dahej in Gujarat, Paradip in Odisha,
Vishakapatnam in Andhra Pradesh- have made some progress. The PCPIR in Tamil Nadu,
since it has been sanctioned recently, is yet to make any significant progress…..”
8.5
As per updates furnished by the Department, the Status of Implementation of PCPIRs as
on 31.03.2014 are as follows:Gujarat PCPIR:
Draft Development Plan / Master Plan has been sanctioned by the State
Government in 2012 and at present 2 Town Planning (TP) schemes are under
implementation.
A PCPIR Regional Development Authority was constituted under the Special
Industrial Regions Act.
The Gujarat Infrastructure Development Corporation (GIDC) has spent Rs. 10,994
crore for provision of infrastructure in the PCPIR.
Additional expenditure of Rs. 12,000 crore by State Government is under way on
infrastructure development like road, ports, water supply etc.
Dahej-Bharuch State Highway to be connected to Delhi-Mumbai national Highway
and National Expressway. Extension of Ahmedabad–Vadodara National
Expressway to Mumbai is also proposed.
Rail connectivity and cargo transportation is available with Delhi-Mumbai
Dedicated Freight Corridor (DFC).
The Anchor Tenant, viz. M/s OPaL, has invested Rs. 18,837 crore out of the total
proposed investment of Rs. 21,396 crore.
EIA process is at advanced stage as per final Terms of Reference approved by
Expert Appraisal Committee (EAC) of MoEF. It is expected to be completed by end
of 2014-15.
An independent evaluation of the implementation of Gujarat PCPIR has been
carried out in order to review the progress of these projects and draw future
course of action.
Andhra Pradesh PCPIR:
Detailed Master Planning has been published in August 2013 and the objections
received were being addressed.
Draft Final EIA with Marine Ecology study and Coastal Regulatory Zone (CRZ)
study is expected to be submitted by January, 2015.
AP PCPIR covers 6 existing SEZs. The units have already made investments of Rs.
34,336 crore.
Rs. 1850 crore has been invested on infrastructure development.
In 2009 Government of India had approved financial support (Viability Gap
Funding or VGF) of Rs. 1206.80 crore for infrastructure projects in PPP mode,
which is being revised based on the latest assessments of project requirements.
The State Government has initiated the work on preparation of Detailed Project
Reports (DPRs) for approval of Government of India on revised funding
requirements.
Hindustan Petroleum Corporation Limited (HPCL), the Anchor Tenant, has
proposed an investment of about Rs. 50,000 crore in VK PCPIR for expansion of
existing refinery from 9.3 MMTPA to 15 MMTPA and setting up a greenfield
refinery of 15 MMPTA capacity. The expansion project was delayed due to
moratorium on expansion of refining activities in the Vishakhapatnam bowl area,
which has now been lifted.
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A LNG terminal is proposed near Gangavaram port by Petronet and one at
Kakinada port by GAIL and Shell.
Road, rail link, water supply, effluent treatment and marine outfall are under
study.
Odisha PCPIR:
A Special Purpose Vehicle named the Paradeep Investment Region Development
Ltd. has been formed to implement the project.
Master Plan is under preparation. It is expected that the Final Master Plan will be
prepared by July, 2015.
Preparation of Detailed Project Report (DPR) is underway for development of
road infrastructure, and will be finalized after Master Plan.
Anchor Tenant viz. Indian Oil Corporation Limited (IOCL) has invested Rs.
32,018 crore (including contract awarded and committed) to set up 15 MMTPA
refinery and a Polypropylene Unit. The refinery project is expected to be
completed by the end of 2014-15.
A 1320 MW thermal power plant by SPI Ports (P) Ltd is approved by High Level
Clearing Authority (HLCA). Surat – Paradeep Gas Transmission Pipeline, an interState Gas transmission pipeline, is being implemented by GAIL and LNG terminal
by IOCL.
IDCO is in discussion with National Environmental Engineering Research
Institute (NEERI), Nagpur and Environmental Protection Training and Research
Institute (EPTRI), Hyderabad, for conducting Environmental Impact Assessment
(EIA) and preparation of Environmental Management Plan. ToR preparation and
approval is expected by September 2014.
IDCO is developing a Plastic Park at Paradeep under the Plastic Parks scheme of
the Department. Final approval of Government of India has been conveyed, and
first installment of Rs. 8.00 crore released.
Bidding process is in progress for contracting out Solid Waste Treatment &
Disposal functions.
Tamil Nadu PCPIR:
MoA has been signed on 20th February, 2014. State Government has taken up the
activities of notification of PCPIR formation of the PCPIR Management Board.
Thereafter Master Planning and EIA activities will be taken up.
The Anchor Tenant, Nagarjuna Oil Corporation Limited (NOCL), has already
invested Rs. 7,430 crore in its refinery project.
The date of commissioning of the first phase of the project is now extended,
mostly due to financial constraints. The capacity of the project has been
increased from 6 MMTPA (Million Metric Tonnes Per Annum) to 12 MMTPA with
a corresponding increase in cost to Rs. 18,503 crore.
A product jetty for evacuation of petroleum fuels and a Single Point Mooring
system for receiving crude are under construction and 51% overall progress has
been achieved.
8.6
When the Committee desired to know the places/PCPIRs where the Government has
undertaken Viability Gap Funding (VGF) for PCPIR projects, the Department in its written reply
stated as under:“The VGF components of the infrastructure projects are approved at the CCEA approval
stage. The respective State Governments are preparing the detailed project report and
feasibility reports. After their approval, the State Government would thereafter move the
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line Ministries/ Departments concerned for the requisite funding under these VGF
schemes of the Department of Economic Affairs for the respective projects. In-principle
approval of VGF scheme for Andhra Pradesh has been given and DPRs are awaited.
The VGF approved by CCEA for the four PCPIRs is as follows:
(Figures in Rs. crore)
Gujarat
Andhra Pradesh
Dahej, Bharuch
Vishakhapatnam – Kakinada
80.50
Odisha
Tamil Nadu
Paradeep
1206.80
Cuddalore- Nagapattinam
716.00
1143.00
+ (budgetary support 1500)
8.7
During their study visit to Visakhapatnam on 11 February, 2013, the Committee were
apprised about problems in implementation of the project due to non-investment of the anchor
tenant (HPCL). The Committee accordingly recommended that the issue relating to the anchor
tenant be resolved and that HPCL should be reallocated the part of the 15 acres land earmarked
for them in the PCPIR region. When asked to explain the progress made in this regard, the
Department replied in writing as under:“Hindustan Petroleum Corporation Ltd (HPCL), the Anchor Tenant, has planned capacity
expansion in their existing refinery from 9.3 MMTPA to 15 MMTPA crude refining
capacity. The expansion was put on hold for some time owing to moratorium on
expansion of refining activities in the Vishakhapatnam bowl area as the region was
assessed as being critically polluted. Recently the moratorium has been lifted.
HPCL is planning a greenfield refinery-cum-petrochemical project of 15 MMTPA
capacity at APSEZ, Visakhapatnam with an investment of USD 5184 million (Rs.
32,000 crore appx.). Andhra Pradesh Industrial Investment Corporation Limited
(APIIC) has identified 600 hectare of land. HPCL has to submit the proposal for
land requirement to the State Government.
During the review meetings held by the PCPIR Monitoring Committee
Department of Chemicals & Petrochemicals advised HPCL, IOCL, GAIL, SABIC etc.
to have discussions and collaborate for future investments in petrochemical
complexes as a consortium.
8.8
During their aforesaid study visit to Visakhapatnam, the Committee met with the local
people at the APSEZ site at Atchutapuram who have their grievances/complaints relating to
compensation and other amenities, etc. In this regard, the Committee desired to know if the
complaints/grievances of the local people have been resolved/ redressed. In reply thereto, the
Department stated in writing as under:“The State Government has conveyed that acquisition of proposed land will be
completed by 31st March 2015 which include the following:
In Nakkapalli Cluster
:
In Kakinada Cluster
:
In Visakhapatnam cluster for PCPIR Expressway :
4663.10 Acre
5529.11 Acre
316.772 Acre
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8.9
During the study visit to the PCPIR project site at Paradip, Odisha on 11 November,
2013, the Committee expressed their concern regarding non-procurement of 150 acres of land
which was already earmarked for the project and recommended that the process of
procurement be expedited. When asked for updates on any further progress in this regard, the
Department replied in writing as under:“Paradeep PCPIR is being developed on a 284 sq. km. (70214 acres) area with
processing area of 123 sq. km. (43%), at Kendrapara and Jagatsingpur districts of
Odisha. During the 1st phase from 2010-2020, 195.34 sq. km. PCPIR will be developed in
Jagatsingpur district near the IOCL refinery. In the 2nd Phase from 2020-2030,
development in 88.80 sq. km. area is proposed in the Kendrapara District. There is no
report of any development being hampered on account of non-availability of land. “
8.10
During the sitting of the Committee held on 28.10.2014, while expressing their strong
concern about non-employment of local people at the PCPIR project in Paradip, it was pointed
out that around 80 percent of those who were engaged by Indian Oil Corporation are from
outside. In response to this, the representative of the Department of Chemicals and
Petrochemicals stated as under:“About Paradip, the Indian Oil Corporation’s refinery is coming up. So, it is in the final
stage of completion. It will start functioning from the first quarter of 2015. At present,
this IOC is working as an anchor tenant. The IOC, as a PSU, comes under the purview of
the Ministry of Petroleum and Natural Gas. But we understand that in IOC during the
construction time, almost all the people who are working there are from the local areas.
Later on, when commissioning comes, at that time they may engage a few people who
are experienced and with technical skill. They might be from local areas or they might
not be from local areas. But at present, like construction workers, they come from the
local areas. Most of the semi-skilled people and the other people who work on the site
are from the local areas. So, so far as refinery is concerned, most of the people engaged
are local. For the other activities, which have not started, like downstream industries
and all, once they get raw materials from Paradip and put up the downstream industries
of plastic or anything else, there also mainly the labour will come from the local market.
In all the four PCPIRs, till now we have engaged them. We have the figures. Around
2,22,000 people have got the employment and most of them are from either the local
districts or nearby districts of the same State.”
8.11
On being pointed out by the Committee that about 70 percent of those who are working
in the Paradip project are from outside the state, the representative of the Department replied
during the evidence as under:“In fact, in Paradip there are outsiders who are working there. But the first preference is
given to the local people. But for some particular trades during construction, there are
some specialized areas in construction for which local people are not available or they
do not have adequate skill."
8.12
On being stressed by the Committee to train the local people and engage them, the
representative of the Department stated during the evidence as under:"…Indian Oil Corporation is planning skill development so that the local people can be
engaged there to the maximum extent possible. Now, it is in construction phase. The
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refinery has not started its operation. During construction phase, they are forced to take
people from outside because local people do not have adequate skills. But if anybody has
that skill and if they are available, we can ask the Indian Oil Corporation people to give
first preference to the local people."
In this regard, the Secretary of the Department added as under:“We agree to it. There cannot be second opinion on that. In fact, the basic purpose of
putting PCPIR is to give employment to the local people and upgrade the local
infrastructure. Most of them are in backward areas. That is the basic effort. It is a long
term project; it is not one or two years’ project…. That is why I was saying that if the
local people do not have such skills, they can be provided training. That is part of it. As
far as Odisha PCPAR is concerned, we have made a programme to visit that place a
fortnight ago. But then, the cyclone came. When I make the programme next time, I will
keep you informed. If any issues are there, I would see that those issues are addressed.”
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Chapter-IX
NEW SCHEMES OF PETROCHEMICALS
9.1
The following table indicates the budgetary allocation for New Schemes of
Petrochemicals:MAJOR HEAD 2852
BE
2013-14
Plan Non-Plan
39.50
--
9.2
Total
39.50
Plan
39.50
(Rs in Crores)
RE
2013-14
Non-Plan
Total
-39.50
Plan
41.50
BE
2014-15
Non-Plan
Total
-41.50
When the Committee asked about the plan of the Department to utilize Rs. 41.50 crore
allocated for 2014-15 and sought details of all projects and programmes planned to be executed
during the year, the Department replied in writing as under:“The allocation for the New Schemes of Petrochemicals for the year 2014-15 is Rs. 57.50
crore, which has been provided under two different heads i.e., (i) grant-in-aid (Rs. 41.50
crore – Plan); and (ii) lump sum provision for project/scheme for the benefit of the NE
Region (Rs. 16.00 crore – Plan). The Department plans to utilize this allocation as under:
Name of Scheme /
Programme
Scheme on National Awards
for Technology Innovations
in
Petrochemical
and
downstream
Plastic
Processing Industry
Setting up of Centers of
Excellence (CoE)
9.3
Annual
Plan
2014-15
(Rs. in
Crore)
1.00
6.00
Setting up of dedicated
Plastic Park
50.00
Programme Manager Fee
0.50
TOTAL
57.50
Process
The nominations for the awards have been invited
and following the finalization of the meritorious
innovations, awards are presented in national
awards function.
Funds will be released to 3 CoEs selected in 12 th
Plan, subject to review of activities by the designated
Expert Panel. The funds have been sought based on
requirements of release of 3rd and final instalment
of Rs. 2 crore to IIT, Delhi and CIPET, Bhubaneswar
and 2nd instalment of Rs. 2 crore to IIT, Guwahati.
Based on the assessment of Detailed Project Report
(DPR), the Department will accord final approval for
setting up of plastic park in Tamil Nadu. The
allocation of Rs. 50 crore for the scheme in the year
2014-15 is required for release of (i) 1st instalment
of Grant-in-Aid (20%) of Rs. 8 crore to Tamil Nadu,
subject to final approval of DPR; and (ii) 2nd
instalment of Grant-in-Aid (35%) of Rs. 14 crore,
each for plastic parks at Madhya Pradesh, Odisha
and Assam, subject to fulfilment of the benchmarks
by the State agencies for release of second
instalment.
To make due payments to programme manager for
implementation of Plastic Park Scheme.
On being asked about the details of utilization of the subsidy during RE 2013-14 for the
above scheme, the Department in its written reply stated as under:58
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“The details of utilisation of funds during RE 2013-14 under the New Schemes of
Petrochemicals are as under:
Name of Scheme /
Programme
Scheme on National Awards
for Technology Innovations
in Petrochemical and
downstream Plastic
Processing Industry
Setting up of Centers of
Excellence (CoE)
Funds
utilised
(Rs. in
Crore)
1.00
6.00
Setting up of Plastic Park
24.00
Programme Manager Fee
0.34
TOTAL
Remarks
Released to CIPET.
Released 2nd instalment of Rs. 2 crore to IIT, Delhi
(CoE-Advanced Polymeric Materials) and CIPET,
Bhubaneswar (CoE- Sustainable Green Materials)
and 1st instalment of Rs. 2 crore to IIT, Guwahati
(CoE- Sustainable Polymers).
Released 1st instalment of Grant-in-Aid (20%) of
Rs. 8 crore each for setting up Plastic Park at
Madhya Pradesh, Odisha and Assam.
Payments
to
programme
manager
for
implementation of Plastic Park Scheme.
31.34
(1)
National Awards for Technology Innovations in Petrochemical and downstream
Plastic Processing Industry
9.4
The Scheme on National Awards for Technology Innovations in Petrochemical and
downstream Plastic Processing Industry aims at incentivizing meritorious innovations and
institutions in various fields of petrochemicals and downstream plastics processing industry.
Central Institute of Plastic Engineering Technology (CIPET) was entrusted the task of seeking
and short listing nominations for the scheme and an amount of Rs.0.63 crore was released to
CIPET in the year 2012-13, for the 3rd National Awards for 2012-13. 306 nominations were
received in eight categories and three subcategories of the scheme. After an intensive process of
screening and evaluation, 11 ‘Winners’ were selected for the National Awards for Technology
Innovation 2012-13. In addition, 08 nominations were selected as ‘Runners up’ and 6
nominations were recommended for ‘Commendation Certificate’ for the year. The function to
facilitate the awardees was held on May 07, 2013 at New Delhi.
9.5
An outlay of Rs.1 crore was provided to CIPET for the Awards for the year 2013-14.
Year-wise numbers of awardeees are indicated below:Number of National Awards
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(2)
Setting up of Centres of Excellence (CoE)
9.6
The scheme aims at improving the existing petrochemicals technology and research in
the country and to promote development of new applications of polymers and plastics.
9.7
During the 11th Five Year Plan, the following two CoEs were approved: (i) National
Chemicals Laboratory (NCL), Pune - Centre of Excellence for Sustainable Polymer Industry
through Research Innovation & Training (CoE-SPIRIT) and (ii) Central institute of Plastics
Engineering & Technology (CIPET), Chennai- Centre of Excellence for Green Transportation
Network (GREET). The assets created under COE-SPIRIT have not only resulted in a boost to
contemporary research in polymer science but also contributed to training of several members
of polymer industries and academia. In case of COE- GREET at CIPET Chennai, the outputs are
in terms of promoting academic, research and educational excellence through partnership
between CIPET, India and university of Toronto and Ford Motors, Canada.
9.8
Under the 12th Five Year Plan, setting up 3 more Centres of Excellence has been
approved, one each at IIT, Delhi; CIPET, Bhubaneswar and IIT, Guwahati. An amount of Rs.8
crore was provided for the scheme in the year 2012-13. The first installment of Rs.2 crore each
was released to IIT, Delhi and CIPET, Bhubaneswar on 26.03.2013.
9.9
An outlay of Rs.6 crore was provided for the scheme in the year 2013-14, of which the
first installment of Rs. 2 crore was released to IIT, Guwahati in July, 2013. An Expert Group to
review the physical and financial performance of the selected CoEs, as in the previous years,
was constituted. The review of the progress of CoEs being set up at CIPET, Bhubaneswar and IIT
Delhi was undertaken during December, 2013- January, 2014. Based on the review and
recommendations of the Expert Group, the 2nd installment of funds amounting to Rs.2 crore
each has been released to IIT, Delhi on 20.02.2014 and CIPET, Bhubaneswar on 31.01.2014.
(3)
Setting up Plastic Parks
9.10
The scheme aims at setting up Plastic Parks, which are manufacturing clusters with state
of the art infrastructure and enabling common facilities to assist the sector to move up the
value chain and contribute to the economy more effectively. Under the scheme, Government of
India provides grant funding up to 50% of the project cost subject to a ceiling of Rs.40 crore per
project. The remaining project cost is funded by the State Government or State Industrial
Development Corporation or similar agencies of State Government, beneficiary industries and
loan from financial institutions.
9.11
There is an allocation of Rs. 50.00 crore for this scheme in 2014-15. Following the
submission of DPR, the proposals from Odisha, Madhya Pradesh and Assam received final
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approval. The Department has released the first installment of Rs. 8 crore of the Grant-in-Aid
each to Madhya Pradesh Plastic Park Development Corporation Ltd (MPPPDCL), Paradeep
Plastic Park Limited (PPPL) and Assam Industrial Development Corporation (AIDC), for setting
up plastic parks at Madhya Pradesh (Mandideep),Odisha (Paradeep) and Assam (Tinsukia)
respectively in the year 2013-14.
9.12
Status of the three parks is as follows:
a)
Madhya Pradesh: The design and preparation of tender document for Package 1
estimated at Rs. 18 crore (trunk services like approach road, power etc.) has been
completed and submitted to Chief Engineer, MPSIDC for technical sanction. As per
indicative timelines for necessary deliverables, NIT for package 1 will be issued by 15th
July 2014, award of work for Package 1 in the 1st week of September 2014, design and
detailing for Package 2 (water supply etc.) by 15th September 2014 with award of work
by October 2014.
b)
Odisha: Industrial Development Corporation of Odisha (IDCO) has prepared
indicative timelines. Preparation of the Master Plan & Geo Tech survey is to be
completed by 30th June, 2014. Construction related works, site development and ETP
will commence by October 2014 and equipment procurement will be done by the end of
the 12th Five Year Plan i.e., March 2017.
c)
Assam: Contour survey, road connecting park with NH-37, site clearance work
and boundary wall (90%) has been done. Three plots have been allotted so far.
Assurances from concerned authorities for power supply, solid waste disposal, water
supply, sewage drainage facilities have been received. Indicative timelines for
deliverables include preparation of Master Plan along with detailed engineering and
drawings by July 2014 and appointment of all contractors by November 2014. Park is
expected to be ready in all respects by December 2016, with continuous process of
allotment of plots.
All the States have been advised to compress the timelines and aim to complete the
Parks by mid-2016.
9.13
On being asked by the Committee to elaborate Plastic Parks, the representative of the
Department explained during the evidence as under:"Sir, this scheme of Plastic Park is basically a plan to develop a particular area taking into
cluster based approach, in which information and common facilities are singularly given
to all units and there comes separate units for plastic processing. This is the scheme of
the Government of India and we give 50% grant and we have approved four parks,
provision of one park in Tinsukhia district of Assam, in Raisan district of MP, Paradeep in
Odisha and one is in Tamil Nadu. The area of Plastic Park is about 100 to 200 acre.
Lands are given to industry after plotting, in which plot may be of half acre or two acre
and this is separate area and the company which purchase, gives land moves to SPV. In
this scheme, on average one plot is of 100 acre and there is approximately 100 units and
as per the study, the direct and indirect employment generation is about 15000 people.
Hon'ble Member has stated that there are 4 Plastic Parks, there was a provision of Rs.75
crore for 12th Five Year Plan, although we needed Rs.160 crore for four Plastic Parks. As
soon as the scheme of Plastic Parks has picked up, various states like UP, Haryana,
Rajasthan and Gujrat have asked that they also needed Plastic Parks. During Global
Investor Summit in MP, Chief Minister told that they wanted second Plastic Park.
Keeping this demand in view, we have demanded Rs.400 crore for 10 Plastic Parks.
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Note for the purpose is ready. Once it is circulated in the Department we would demand
Rs.400 crore for the finance. We have also spoken to the Secretary and the Secretary is
of the view that even Rs.400 crore is not enough because each State should have at least
one. After getting approval of at least 10 Plastic Parks and if the scheme runs
satisfactorily then next year, it will be our plan to have at least one Plastic Park in each
state."
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Chapter-X
Bhopal Gas Leak Disaster
10.1
The Bhopal Gas Leak Disaster occurred in the intervening night of 2nd/3rd
December,1984 when Methyl Iso-cyanate (MIC), a lethal gas stored in two tanks at the
pesticide plant site of Union Carbide India Limited (UCIL) at Bhopal, leaked into the
atmosphere causing thousands of deaths and injuring a large number of people. Various relief
and rehabilitation measures initiated immediately after the disaster are still continuing.
10.2
The details of the budgetary allocation for Bhopal Gas Leak Disaster is as under:-
Plan
--
10.3
MAJOR HEAD 2852
BE
2013-14
Non-Plan
Total
Plan
126.59
126.59
--
(Rs in Crores)
RE
2013-14
Non-Plan
46.59
Total
46.59
Plan
--
BE
2014-15
Non-Plan
43.55
Total
43.55
When asked to explain the huge fluctuations in allocations made under this Head from
year to year, the Department replied in writing as under:“Office of the Welfare Commissioner, Bhopal Gas Victims, who is responsible for
disbursement of compensation to Bhopal Gas victims, has not been able to utilize the
entire allocated sum, despite all efforts undertaken by them for disbursal of ex-gratia, on
account of factors such as want of police verification in many litigated claims involving
multiple successors, lack of certification in claim applications for Cancer and TRF cases,
non-appearance of claimants etc. Hence that Office has surrendered the excess fund.
During 2014-15, the total allocation of Rs. 43.55 crore includes a sum of Rs. 35.94
crore for ex-gratia. The amount has been arrived at taking into account the inputs
received from the Registrar, Office of Welfare Commissioner, keeping in view the trend
of disbursal in previous year and number of pending cases.”
10.4
When the Committee asked for a detailed status report on the number of claims for
compensation settled as well as those still pending and the time by which the pending claims
are likely to be settled including the efforts being made in this regard, the Department in its
written reply submitted as under:“The Office of the Welfare Commissioner, till date, has awarded/disbursed Rs. 1548.59
crore as compensation, out of money provided by Union Carbide Corporation, USA, in
settled cases of 5,74,386 claimants belonging to the categories of death, permanent
disability, temporary disability, injury of utmost severity cases, minor injury, loss of
property/PSU and loss of livestock.
The Supreme Court in its order dated 26th October, 2004 had approved further payment
of pro-rata compensation to the Bhopal Gas Victims whose cases had earlier been
settled. In compliance, pro-rata compensation has been awarded to 5,62,959 claimants
with payment of a sum of Rs. 1511.379 crore made till 31.07.2014. An application
moved by the Welfare Commissioner to treat the remaining 11,427 cases of absentee
claimants as closed is pending decision in the Supreme Court.
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As per the decision of the Cabinet in June, 2010, disbursal of ex-gratia to the Gas victims
was commenced by the Office of the Welfare Commissioner on 19.12.2010. During the
period from 19.12.2010 to 31.07.2014, 54,937 cases have been decided by the Welfare
commissioner and a sum of Rs. 738.33 crore has been sanctioned/ disbursed in these
cases.”
10.5
The Committee further asked the Department to provide details of utilization of the fund
allocated during RE 2013-14 for the Bhopal Gas Leak Disaster and explain the shortfall in
utilization, if any. In reply thereto, the Department stated in writing as under:“A sum of Rs. 38.10 crore was allocated under RE 2013-14 for making payment to exgratia payment to Bhopal Gas victims. The Office of the Welfare Commissioner could not
utilize the entire allocated sum, despite all efforts undertaken by them. The total amount
utilized during the FY 2013-14 is Rs. 28.25 crore and remaining amount of Rs. 9.85 crore
was surrendered against RE.”
10.6
During the course of evidence, the Secretary, Department of Chemicals and
Petrochemicals apprised the Committee as under:“.....The original compensation which was sanctioned in 1992 was 470 million US dollars
amounting to Rs.1,548 crore. That was originally distributed. Then, again under the
Orders of the Supreme Court, the pro rata compensation was sanctioned and that was
based on the increase in the rate of dollar and the bank interest. That amount was
Rs.1,511 crore. That Order came in 2004, and that had also been disbursed. Now, the
Government in 2010 sanctioned an ex gratia grant of Rs.874 crore. That was for the
specific cases where people had suffered specific injuries – heart diseases, kidney
diseases, permanent disabilities and temporary disabilities. That amount was Rs.874.28
crore to be exact. Out of that amount, a sum of Rs.742 crore has already been disbursed
and the balance amount of Rs.130 crore is pending. The Welfare Commissioner, Bhopal
Gas, has written to the Supreme Court saying that they are not able to trace about 12,000
cases, which get coverage under this scheme, and therefore, they should be permitted to
write off those cases. So, the case is pending before the Supreme Court.”
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OBSERVATIONS/RECOMMENDATIONS
The Committee note with concern that import of major chemicals and
petrochemicals has been continuously increasing at the rate of 20 per cent from
2009-2013 due to gap between production and consumption in the country. While
the value of import of major chemicals & petrochemicals was pegged at Rs.
202347 crore and its share in the total imports was 7.6% during 2012-13, the
same rose to Rs. 234258 crore contributing 8.6% to the total imports during
2013-14. During the course of evidence, the Committee were informed that there
is a shortage of feedstock like gas and petrol for petrochemicals companies in the
country and therefore, these companies have to import the feedstock which leads
to increase in cost and other associated problems. The Committee were also
informed that in order to address the shortage of feedstock for the petrochemicals
companies, the Government has conceptualized to set up Reverse SEZs in foreign
countries primarily in oil rich countries like Iran and Myanmar where the
processing plants will be set up and then the finished products will be imported to
India at cheaper rates. In this context, initial discussions, exchange of ideas,
concept building and cooperation with these countries have already been
initiated by the Government. It was also informed that the efforts are being made
to promote manufacturing of specialty chemicals which are small volume
chemicals but high priced and performance chemicals. These chemicals are not
used directly but they act as catalysts and change the performance of the
chemicals. Most of these chemicals are produced in the West. The Committee are
of the view that the chemicals and petrochemicals sector is a major segment of
manufacturing industry and plays a pivotal role in various downstream industries
and therefore, the Government should map out strategies for the growth of this
sector reducing thereby the country’s dependence upon foreign imports of
chemicals
and
petrochemicals,
boosting
employment
and
reduction
in
expenditure of valuable foreign exchange. The Committee, therefore, recommend
that the Department should make concerted and coordinated efforts to expedite
the process of consultation with all concerned with a view to set up Reverse SEZs
safeguarding the interests of Indian workers and investments in these countries.
The Department should also formulate action plan to produce specialty chemicals
The Committee would like to be apprised of the initiatives taken by the
Department in this regard.
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2.
The Committee are distressed to note that chemical manufacturing
companies are a major source of environment pollution. The hazardous wastes
are reportedly being discharged by the factories with out being treated, causing
environment and water pollution in and around the complex of the factory
adversely affecting the human health as well as aquatic life of the region. During
the course of evidence, it was reported that industrial wastes are being pumped
into Hussain Sagar, a lake situated at the heart of Hyderabad city, polluting the
lake and causing skin disease to the nearby residents, etc. The issue is assuming
critical dimensions leading to soil degradation, water pollution, coastal pollution
adversely affecting pisciculture and aquaculture and the livelihood of fishermen
community, etc. The Committee also firmly believe that economic growth cannot
be sustained without taking care of the environment.
During the course of
evidence, the Secretary of the Department was candid enough to accept the fact
that awareness about environment and environment compatibility is very poor in
India. The toxic and hazardous wastes discharged by the chemical factories are
contaminating our water bodies and turning our soil into barren land. According
to him, though the regulatory power enforcing environment compatibility norms
rests with the Ministry of Environment and Forest and only they have the
authority to issue orders and punish the culprits, however, the Department will
come out with a Policy in this regard soon. In this regard, the Committee were also
informed that a National Chemical Policy is being prepared by the Department on
the issue which will be brought out very soon. After various rounds of
consultations with all the stakeholders during the period from July 2012 to
December 2013, the updated version of draft policy have now been sent for InterMinisterial consultation and the policy document is expected to be finalized soon.
According to the Department, the Policy aims to make strategies for sustainable
growth and development, increasing investments, ensuring feedstock availability,
R&D promotion and that the emphasis has been on Green Chemistry, HRD,
technology up-gradation, disaster management, safety in chemical plants, etc. The
Committee are of the strong view that the Department can not escape their
responsibility on the issue and being the nodal authority, it is their primary duty
to allow establishment of only those factories which are environmentally
compatible. The Committee believe that the said policy would address the various
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problems afflicting the chemicals and petrochemicals sector in the country. The
Committee, therefore, recommend that the process of consultation on the
National Chemical Policy and finalization of the policy document incorporating
both the growth of the sector and environmental sustainability may be expedited.
The Committee also desire that the Department should take remedial measures in
coordination with Ministry of Environment, Forest and Climate Change and with
all concerned to check pollution caused by the chemical factories. The Committee
expect to be apprised of the initiatives taken by the Department in this regard.
3.
The Committee are constrained to note that funds allocated to certain
schemes of the Department have not been fully utilized during the preceding year
2013-14. As for example, HOCL failed to utilize its allocated amount of Rs. 8.04
crore totally. In this regard, the Department has explained that Rs. 8.04 crore
could not be released as they could not get any approval from Planning
Commission and Ministry of Finance. Similarly, out of Rs. 3.00 crore allocated to
CPDS during 2013-14 at RE stage, Rs. 0.14 crore could not be utilized due to nonreceipt of approval of Department of Expenditure to the proposal of the
Department for grant of assistance to FICCI for organising “India Chem Gujarat
2013” . Again, out of Rs. 1.50 crore meant for CWC for 2013-14, Rs. 0.54 crore
could not be spent on several awareness programmes which could not be
implemented during the year. The Committee are not convinced with the
grounds/reasons given by the Department for under utilisation of funds allocated
during the year 2013-14. The situation highlights the poor financial and physical
performance of the
Department which may have adversely affected the
programmes of the Department in achieving some of its planned targets during
the year. The Budget Estimate (BE) for 2014-15 is Rs. 207 crore which includes Rs.
15 crore for HIL, Rs. 20.50 crore for HFL and Rs. 102.98 crore for CIPET. The
Committee expect the Department to formulate plans well in advance to utilize
fully the funds allocated for 2014-15 for various schemes. The Committee
recommend that the Department should work in close co-ordination with all
concerned so as to ensure optimum and timely utilization of allocated funds to
achieve the laid down financial and physical targets. The Committee would like to
be apprised of the initiatives undertaken by the Department in this regard.
4.
The Committee note that Central Institute of Plastic Engineering and
Technology (CIPET) , apart from conducting academic programmes in various
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areas of polymer technology, also renders technology support services to the
plastics and allied industries viz. design, tooling, plastic processing & testing,
inspection, quality control etc. The non plan support to CIPET was discontinued
from 2007- 08 as it has been managing its day to day functioning from the revenue
generated through internal resources since then and does not depend on
Government of India for those expenditures. CIPET caters to Academic,
Technology Support and Research (ATR) activities through its 23 Centres across
the country for the growth of polymer and allied industries in the country. Every
year, CIPET trains around 40,000 students through long term professional and
short term skill development programme. With anticipated growth rate of 8 to
10% in the plastics processing machinery, there is an increased requirement of
skilled manpower to operate these machineries and lead the industrial growth. In
order to meet the manpower requirements of ever growing polymer and allied
industries, CIPET has been increasing the infrastructure capabilities to augment
its intake capacity. The Department also plans to expand CIPET centre - one in
Hyderabad by way of high learning centre and vocational training centre and
another vocational training centre in Vijayawada. The Department through CIPET
is also conducting various awareness programmes on positive attributes of
plastic/recyclable properties of plastics along with various technological options
for recycling of waste plastics. The Committee appreciate the good work being
done by the CIPET to generate industry responsive skilled manpower and
technical support services for all the plastic manufacturing industries etc. As a
result thereof, the Committee hope that India will be able to face the challenges
posed by imports of plastic products including from China. The Committee also
expect that the Department in coordination with CIPET will continue to conduct
its awareness programmes on positive attributes of plastic and recycling of plastic
waste to check its adverse impact on environment. Keeping in view the increased
requirement of skilled man power for the growth of petrochemical sector, it is
imperative for CIPET to expand its centres which may be set up near planned
plastic parks and PCPIRs. The Committee would like CIPET to prepare an action
plan for the purpose. The proposed CIPET centres including one in Hyderabad and
the other in Vijayawada will also be set up with in a fixed time frame with out any
delay in order to cater the needs of petrochemical industries of the region. The
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Committee would like to be apprised of the action programme of the Department
in this regard.
5.
The Committee note with great concern that despite of revival efforts of
Hindustan Organic Chemicals Limited (HOCL) in 2008, the Company is making
losses over the past few years. The major reasons elaborated by the Department
for the poor financial condition of HOCL are the uneconomic small capacity of its
plants, obsolete technology, excess manpower and dumping of its main products
by foreign countries. The Company was referred to BIFR on 27 November 2013
due to total erosion of the net-worth. M/s FACT Engineering & Design
Organisation (FEDO) has been engaged to conduct a revival study and they have
submitted a report to HOCL and action will be taken as decided by the
Government on the FEDO study. The Committee were informed that in order to
put HOCL back on a sustained growth path, the possibility of utilization of vacant
land available at Rasayani is being explored through various options like leasing
out to other government companies, merger and /or joint venture etc. Rashtriya
Chemicals and Fertilisers (RCF), Narmada Fertilisers Plant in Gujarat and Indian
Space Research Organisation (ISRO) have shown their interest to invest money. In
view of the foregoing, the Committee recommend that FEDO study report on HOCL
may be examined in detail and action to revive the Company may be taken at the
earliest. The Department may also explore the possibility of utilization of vacant
land available at Rasayani particularly to put HOCL on sustained growth path. The
Committee would like to be apprised of the initiatives under taken by the
Department and the progress made therein .
Similarly, Hindustan Fluorocarbon Ltd (HFL) which is a subsidiary of HOCL and
engaged in the manufacture of Poly Tetra Fluoro Ethylene (PTFE) has also been
incurring losses due to low sales realization, high material cost, high interest,
depreciation burden and uneconomical plant size. Consequent upon the complete
erosion of net worth, HFL was declared a sick industrial company. As part of the
revival plan, the Department has released an amount of Rs.3.60 crore for Modified
Poly Tetra Fluoro Ethylene (M-PTFE) this year and action for release of Rs. 13.20
crore for various refurbishment schemes and new activities has been under
progress. The Department has informed that the company is expected to start
making profits after implementation of the above Plan projects. In this regard, the
Committee are of the view that the revival of HFL Plant at Rudraram in erstwhile
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Medak district of Andhra Pradesh (and now in Telangana state) is very crucial for
the people of Telangana State and it will go a long way in building the industrial
base for the new State of Telangana. Hence, revival plan needs to be expedited on
a priority basis. The Committee, therefore, recommend that the Department
should pay special attention and expedite the revival plan of HFL. The Committee
expect from the Department to work out the concrete strategy for turnaround of
the HOCL and HFL in right earnest and to ensure that these companies achieve
breakeven at the earliest. The Committee desire to be apprised of initiatives taken
by the Department and the progress made in this regard.
The Committee were informed that Hindustan Insecticides Ltd (HIL) was
allocated Rs. 14 crore for investment in enhancing the capacity of existing
Mancozeb Plant at Udyogmandal. The Committee note that the construction of
Mancozeb Plant is under progress. The mechanical work of the Plant is nearing
completion and the production is likely to start by March, 2015. HIL has also taken
initiatives to develop a new product to be used as Indoor Residual Spray, as an
alternative to DDT, which is expected to be a major breakthrough in vector
control. The Committee consider these two major projects to be of huge
importance not only for the growth of the Company but also for the country at
large. Therefore, the Committee recommend that every efforts may be made to
ensure that Mancozeb Plant is completed within the stipulated time. The
Committee also recommend that the initiatives taken by HIL for developing
Indoor Residual Spray may also be taken to its logical conclusion and vigorous
efforts may be made to establish a pilot plant for the purpose. The Committee
may be intimated about progress made in this regard.
6.
The Committee regret to note that the Assam Gas Cracker Project (AGCP)
has not yet been commissioned. It was conceptualized in pursuance of
Memorandum of Settlement signed between Central Government, All Assam
Students Union and All Assam Gana Parishad on 15 August 1985. The initial cost
of the project was Rs.5460.61 crore. A joint venture company namely
Brahamputra Cracker & Polymer Limited (BCPL) is implementing the project. The
revised cost estimate of the project is Rs.8920 crore. The pre-commissioning
activities in several units are in progress. The project will lead to setting up of
plastic processing units in the neighbouring areas. Consequently, substantial
employment is envisaged to be generated on its completion. The Committee were
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informed that the mechanical completion of the project is likely to be completed
by end of November, 2014 and pre-commission and commission activities have
already started . It was schedule to commission in September 2014 which has now
been further revised to June 2015. The Committee note with concern that the per
capita consumption of plastic in North East is only two kilograms while for the
rest of India, it is 10 kilograms. Thus, there is a huge scope for development of
plastic parks in the North Eastern States and the Department is chalking out a
programme to push it. A proposal has also been made to the Assam Government
to set up a plastic park at Guwahati apart from the one proposed at Tinsukia to
make use of the huge quantum of feedstock produced by AGCP. The Department
also plans to advocate plastic parks in the nearby north-eastern states to set up
their own plastic parks for which feed stocks could be conveniently supplied by
AGCP. Further, the Department proposes to involve CIPET to train the local people
in plastics-related skill development programmes so that they may be able to get
suitable placement in AGCP and other related industries.
In view of the foregoing, the Committee now hope that the timelines for
completion of the project will be strictly adhered to with out any further delay so
as to achieve the mechanical completion of the project by November 2014 and its
commissioning by June 2015 and recommend that the Department should make
vigorous efforts in coordination with all concerned including DONER to set up
plastic parks in North East States and organize skill development programme for
the local public to enable them to get employed by major industries. The
Committee also recommend that the Department should also organize awareness
programmes simultaneously extensively so that the local people are aware of the
opportunities available for them for training and to get employment in this sector.
The Committee would like to be apprised of the initiatives taken by the
Department in this regard.
7.
The Committee note that
the concept of Petroleum, Chemicals and
Petrochemicals Investment Regions (PCPIRs) is a cluster approach to promote the
Petroleum,
Chemical
and
Petrochemical
sectors
in
an
integrated
and
environmental friendly manner, on a large scale. The PCPIR policy was
formulated in April 2007 to give a boost to this sector. At present, PCPIR projects
are being set up in four States of Gujarat, Andhra Pradesh and Odisha and Tamil
Nadu. All these PCPIRs except Tamil Nadu, have made some progress. As for Tamil
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Nadu PCPIR, the Department has signed Memorandum of Agreement with
Government of Tamil Nadu in February 2014 and it has yet to make any
significant progress. The Department has also constituted a Steering Committee
for each of the PCPIRs except Tamil Nadu to monitor the implementation
progress. This would help in expediting the implementation of various projects in
the PCPIRs. The Committee also note that these PCPIRs were envisioned to give
boost
to petrochemical industries, add productivity and decrease India’s
dependence on import of petrochemical feedstock and to develop the region
holistically in an environmentally manner as well as to provide huge employment
opportunities particularly to the local people. Keeping in view the benefits which
would accrue to the economy and the local region as result of PCPIRs projects, the
Committee recommend that , the Department being the nodal authority should
make vigorous and coordinated efforts to expedite the execution of PCPIR
projects being set up in aforesaid four States. The Committee hope that as a result
of PCPIRs projects, a large number of people of the area will be benefited in terms
of employment and the economy of the country would get a tremendous boost.
The Committee expect from the Department to regularly monitor the progress of
each of these projects. The Committee would like to be apprised of the action
taken by the Department in this regard.
8.
The Committee note that the primary objective for development or
construction of any project like PCPIR is to create employment opportunities to
the local people particularly those who have been displaced/affected by the
project and whose land has been acquired for the project. However, it has come to
the notice of the Committee that only 30-40 per cent of the people are being
employed from the local market and the rest are outsiders. According to the
Department, certain projects like the PCPIR project in Odisha, the first preference
for the job is given to the local people and outsiders are employed only in cases
where local people are not available for certain specialized areas in construction
or if they do not have adequate skill for the job. The Committee are of the view
that since the local people have sacrificed their land for construction of industrial
projects, the benefits in terms of employment ought to be given first to the local
people to the extent possible and in case they do not have adequate skill then it is
obligatory on the part of the Government/Company to train and engage them for
the job in their project. The Committee, therefore, recommend that the
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Department and concerned PSUs, as well as anchor tenants in projects like PCPIRs
should make it a policy to give first preference to the local people for employment
at their project site. The Committee also recommend that the Department should
take the initiative in coordination with all stakeholders to undertake skill
development programmes to train local people for their employment in the
industrial projects set up/being set up in the area. Such Skill development
programmes should be made an essential component to the project itself. The
Department should undertake regular visits to PCPIRs, to monitor the skill
development programmes and also to address the problems of the local people of
the regions. While undertaking such visits, the Committee and the Members of
Parliament of the area should also be invariably kept informed. The Committee
would like to be apprised of the initiatives being taken by the Department in this
regard.
9.
The Committee note that the Indian Plastics industry is large but highly
fragmented with dominance of tiny, small and medium units and thus the
Department has formulated setting up of Plastic Parks scheme with a view to
synergize and consolidate the capacities through cluster development. The
scheme aims at setting up plastic parks
with requisite state of the art
infrastructure and enabling common facilities to assist the petrochemical sector
to move the value chain and contribute to the economy more effectively. The
Department has approved four Plastic Parks, one each in Madhya Pradesh,
Odisha, Assam and Tamil Nadu and all the States have been advised to compress
the timelines and aim to complete the Parks by mid 2016. According to the
Department, the existing 12th Plan budgetary allocation for the scheme is
insufficient even for the four proposals under implementation and the proposals
from States like Haryana, Uttar Pradesh, Gujarat and Kerala are not being
considered for the present. But the Department would request Planning
Commission during Mid-Term Appraisal to enhance the Plan allocation for Plastic
Parks to Rs. 400 crore to enable it to set up 10 Plastic Parks. During the course of
evidence, the Committee were informed that while the per capita global
consumption of Plastic is 30 kg and that of USA is more than 100 kg, India’s
consumption of Plastic is only 10 kg. The imports of petrochemical has been
increasing at a growth rate of 20% which is primarily due to a huge gap between
production and consumption of petrochemicals in the country.
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In view of the foregoing, the Committee are of the opinion that establishment of
Plastic Parks in each State in the country is very essential for augmenting
production of petrochemicals and also for reduction of its imports in the country.
It is, therefore, imperative for the Department to make vigorous efforts to set up
Plastic Parks in all the States of the country. Keeping this aspect in view, the
Committee recommend that the Department should present a strong case before
the Planning Commission during the Mid-Term Appraisal of the 12th Plan for
allocation of sufficient funds to enable them to set up initially 10 Plastic Parks in
the country. The Committee further recommend that the Department should
prepare a road map to set up at least one Plastic Parks in all the States of the
country. The Committee hope that four plastic parks would be set up as per the
time schedule by mid 2016 with out any delay. The Committee would like to be
apprised of the action taken by the Department in this regard.
10.
The Committee regret to note that various relief and rehabilitation
measures initiated immediately after the Bhopal Gas Leak disaster in the
intervening night of 2nd/3rd December,1984, are still continuing. The Office of
the
Welfare
Commissioner
awarded/disbursed
Rs.
1548.59
crore
as
compensation, out of money provided by Union Carbide Corporation, USA, in
settled cases of 5,74,386 claimants belonging to the categories of death,
permanent disability, temporary disability, injury of utmost severity cases, minor
injury, loss of property/PSU and loss of livestock. The Supreme Court in its order
dated 26th October, 2004 approved further payment of pro-rata compensation to
the Bhopal Gas Victims whose cases had earlier been settled. In compliance, prorata compensation was awarded to 5,62,959 claimants with payment of a sum of
Rs. 1511.379 crore made till 31.07.2014. An application moved by the Welfare
Commissioner to treat the remaining 11,427 cases of absentee claimants as closed
is pending decision in the Supreme Court. As per the decision of the Cabinet in
June, 2010, disbursal of ex-gratia of Rs. 874.28 crore to the Gas victims was
commenced by the Office of the Welfare Commissioner on 19.12.2010. That was
for the specific cases where people had suffered specific injuries – heart diseases,
kidney diseases, permanent disabilities and temporary disabilities. Out of that
amount, a sum of Rs.742 crore has already been disbursed and the balance
amount of Rs.130 crore is pending. In view of the foregoing, the Committee hope
that all genuine claims of the victims of the gas leak disaster for the compensation
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may have been settled and every efforts may have been made to trace the genuine
claimant before approaching the Apex Court to write off those cases which are
untraceable. Apart from financial assistance granted to the gas victims, the
Committee would like to know the various rehabilitation measures undertaken by
the Government in coordination with State Government for gas victims. The
Committee would like to know the progress of the pending case before the Apex
Court.
New Delhi;
5,December, 2014
14,Agrahayana, 1936 (Saka)
Anandrao Adsul
Chairperson
Standing Committee on
Chemicals and Fertilizers
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APPENDIX-I
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77
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Or
click given below address
http://indiabudget.nic.in/ub2014-15/eb/sbe6.pdf
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APPENDIX-II
( Refer to Para 7.18)
The details of all activities undertaken under the Chemical Promotion and Development
Scheme (CPDS) during the last financial year 2013-14 is given below:-
S.
No.
1
Organization
Seminar/conference/event
Sanction No. and date
CIPET
33027/3/2013-PC-IV
22.04.2013
50,00,000
2
DAVP
Advancement in polymeric
materials- 2013
Poly India
46016/29/2012-PC-IV
5,50,000
3
CIPET
APM 2013
33027/3/2013-PC-IV
7,71,000
4
FICCI
46016/10/2010-PC-II
4,00,000
5
CIPET
46016/10/2010-PC-II
45,00,000
6.
C-I. 38011/0/2011-30
2,00,000
51020/26/2013-C-II
3,00,000
7th ISFR, 2013 during 23-26th
October, 2013 at New Delhi
46016/17/2013-PC-II
4,00,000
9.
Durgapur
Vishwagandha
Science Society
Dyestuff
Manufacturer’s
Association of
India
Indian Institute
of Planning,
Dehradun
CIPET
Seminar on Potential of
Petrochemicals sector to Northern
India
Technical Seminar on Plastic
recycling and waste management at
Six places in the year 2013-14
Innovative Experiment in Chemistry
in school and colleges for the year
2013-14
Workshop on “Green Technology” on
20th September, 2013 at Mumbai
APM-2012
48,00,000
10
CIPET
Plastivision India 2013
11
EPTRI,
Hyderabad
DMAI
Workshop on Plastic Waste
Management
Conference on textiles: Business &
Environment sustainabilityChallenges for the colorant industry.
3rd Industrial green chemistry world
(IGCW 13)
33027/38/2011-PC-IV
21.10.2013
33027/38/2011-PC-IV
21.10.2013
46016/33/2013-PC-II
7.
8.
12
13
14
15
Green
Chemistree
Foundation
CII
16
National
Institute of
Nutrition,
Hyderabad
ICC
17
FICCI
18
AMAI
19
CIPET
Workshop on “Green Technology In
the Chemical Industry”
International conference on
emerging issues on health effects of
pesticides residues in food and
environment
Workshop on sensitizing on
Stockholm Convention
Seminar on Application of Green
Chemistry to Agrochemicals
Seminar on operation and
maintenance of membranes
International Conference on
advancements in Polymeric Material
(APM)-2014
Amount
5,00,000
7,70,790
40018/42/2009-Ch.I
14.11.2013
4,00,000
C-I. 38015/6/2011-30
5.12.2013
4,00,000
C-I. 38013/0/2011-30
6.12.2013
C-I. 38015/8/2013
10.12.2013
2,75,000
C-I. 37013/2/2013-Ch.I
6.1.2014
C-II. 18012/25/2013CHEM.I
08.01.2014
C-I. 38015/7/2013-CH.I
13.01.2014
45012/23/2013-PC-IV
30.1.2014
3,00,000
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3,50,000
5,00,000
4,00,000
50,50,000
20
22
Asian Polymer
Association,
Delhi
Krishi Vigyan
Kendra
Gandhigram
Rural Institute
ICC
23
ICC
24
IIChE, Mumbai
25
EPTRI,
Hyderabad
FICCI
21
26
International conference on
Polymers
46016/24/2011-PC-II
5,00,000
Technological week on Plastic and
Chemical of sustainable agriculture
development
46016/11/2014-PC-II
1,50,000
2nd workshop on sensitizing
Stockholm Convention and
Rotterdam Convention
7th Annual India Chemical Outlook
Conference
C-I. 37013/2/2013-CHEM.I
4.3.2014
3,00,000
C-I. 38013/2/2011-30CHEM.I
12.3.3014
C-I. 38015/1/2013-CHEM.I
19.3.2014
46016/33/2013-PC-II
28.3.2014
C-I.38012/5/2012-30
31.3.2014
Total
7,50,000
10th Outstanding Young Chemical
Engineers (OYCE-2014)
Workshop on Plastic Waste
Management
Seminar on Agrochemicals
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40,000
6,97,278
3,00,000
2,86,04,068
APPENDIX-III
MINUTES
MINUTES OF THE SECOND SITTING OF THE
STANDING COMMITTEE ON CHEMICALS & FERTILIZERS
(2014-15)
The Committee sat on Tuesday, the 28 October, 2014 from 1500 hrs.
to 1700 hrs. in Committee Room 'C', Parliament House Annexe, New Delhi.
PRESENT
SHRI ANANDRAO ADSUL - CHAIRPERSON
MEMBERS
LOK SABHA
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
I.
15.
16.
17.
18.
19.
20.
Smt. Anju Bala
Shri Sankar Prasad Datta
Shri Satish Kumar Gautam
Adv. Joice George
Shri K. Ashok Kumar
Shri Mohanbhai Kalyanjibhai Kundariya
Shri Kamalbhan Singh Marabi
Shri Chhedi Paswan
Shri Rajendran S.
Dr. Kulamani Samal
Dr. Uma Saren
Shri Tasleem Uddin
Smt. Rekha Verma
RAJYA SABHA
Shri Biswajit Daimary
Shri Brijlal Khabri
Shri Narayan Lal Panchariya
Shri K. Parasaran
Shri Garikapati Mohan Rao
Shri Palvai Govardhan Reddy
i.
ii.
iii.
Smt. Rashmi Jain
Shri U.B.S. Negi
Shri A.K. Srivastava
SECRETARIAT
Joint Secretary
Director
Additional Director
MINISTRY OF CHEMICALS AND FERTILIZERS
(DEPARTMENT OF CHEMICALS & PETROCHEMICALS)
1.
2.
3.
4.
5.
6.
7.
8.
Shri Surjit Kumar Chaudhary
Shri S.C. Kuntia
Dr. A.J.V. Prasad
Shri Avinash Joshi
Sh. A.K. Mathur
Shri Pranoy Sharma
Shri M.K. Vimal
Ms. Ranjana Kale
Secretary
Additional Secretary & Financial Advisor (AS & FA)
Joint Secretary
Joint Secretary
Deputy Director General
Director
Director
Economic Advisor
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II.
REPRESENTATIVES OF PSUs
1.
Dr. S.K. Raza
Director, Institute of Pesticides Formulation
Technology (IPFT)
2.
Dr. S.K. Nayak
DG, Central Institute of Plastics and
Engineering Technology (CIPET)
3.
Sh. V.B.R. Nair
CMD, Hindustan Organic Chemicals Limited
(HOCL)
4.
Sh. K. Hari Kumar
CMD, Hindustan Insecticides Limited (HIL)
5.
Sh. P.N. Prasad
MD, Brahmaputra Crackers and Polymers
Limited (BCPL)
2.
At the outset, Hon’ble Chairperson welcomed the Members of the Committee and
representatives of the Ministry of Chemicals & Fertilizers (Department of Chemicals and
Petrochemicals) to the sitting. Their attention was invited to the provisions contained in the
Direction 55(1) of the Directions by the Hon'ble Speaker regarding confidentiality of the
Committee's proceedings.
3.
After the witnesses introduced themselves, the Secretary, Department of Chemicals and
Petrochemicals briefed the Committee about 'Demands for Grants’ of the Department for the
year 2014-15 and highlighted the Department's plans and priorities for the current financial
year.
4.
During the discussion, the Chairperson and Members of the Committee raised queries on
several issues which were replied to by the Secretary, Department of Chemicals and
Petrochemicals and other officials. The Members emphasized the need to employ local people
in any projects undertaken by the Department and also stressed the need for making chemical
industries environmentally sustainable. They also stressed for revival of the sick units and
increase the production of chemical and petrochemical locally by introduction of new
methodology such as PCPIRs and Plastic Parks etc.
5.
The Chairperson, thereafter, thanked the witnesses for appearing before the Committee
as well as for furnishing the valuable information to the Committee and directed them to
furnish the requisite information in writing on the points raised during the discussion on which
the information was not readily available with them.
6.
A copy of the verbatim record of the proceedings of the sitting has been kept.
The Committee then adjourned.
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APPENDIX-IV
MINUTES
MINUTES OF THE EIGHTH SITTING OF THE
STANDING COMMITTEE ON CHEMICALS & FERTILIZERS
(2014-15)
The Committee sat on Monday, the 08 December, 2014 from 1500 hrs.
to 1530 hrs. in Committee Room 'E', Parliament House Annexe, New Delhi.
PRESENT
Shri Anandrao Adsul - Chairperson
MEMBERS
LOK SABHA
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
i.
ii.
iii.
3.
Shri Idris Ali
Smt. Anju Bala
Shri B.N. Chandrappa
Shri Sankar Prasad Datta
Shri Rangaswamy Dhruvanarayanan
Shri Satish Kumar Gautam
Adv. Joice George
Shri K. Ashok Kumar
Shri Chhedi Paswan
Shri S. Rajendran
Shri Chandu Lal Sahu
Dr. Uma Saren
Smt. Rekha Verma
RAJYA SABHA
Shri Biswajit Daimary
Shri Narayan Lal Panchariya
Shri K. Parasaran
Shri Palvai Govardhan Reddy
SECRETARIAT
Smt. Rashmi Jain
Shri U.B.S. Negi
Shri A.K. Srivastava
-
Joint Secretary
Director
Additional Director
The Committee thereafter took up for consideration the following draft Reports:
a)
b)
Demands for Grants (2014-15) of the Ministry of Chemicals and Fertilizers
(Department of Chemicals and Petrochemicals);
xxxx
xxxx
xxxx
xxxx
4.
The draft Report relating to the Department of Chemicals and Petrochemicals was
adopted by the Committee without any amendment.
5.
The Committee authorised the Chairman to make consequential changes, if any, arising
out of the factual verification of the Reports by the Department of Chemicals and
Petrochemicals of the Ministry of Chemicals and Fertilizers and present the same to both the
Houses of Parliament.
6.
xxxx
xxxx
xxxx
xxxx
The Committee then adjourned.
------------------------------------------------------------------------------------------------------xxxx xxxx Matters not related to this Report.
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